Grey divorce financial planning is crucial for peace of mind as well as your financial security.
Whether you were the one who asked for the divorce or if you were blindsided by the request from your spouse, it’s important that you be proactive and take steps to navigate your way through your grey divorce.
Here are financial considerations to ponder during your divorce proceedings.
- Get the most out of the money you’re spending on your divorce. If you and your spouse have decades of history together and planned for retirement and your Golden Years together, you need assure you’re going to remain financially equipped. Take steps in the planning and negotiation stags of the divorce to assure you’re getting what you deserve.
- Understand the ramifications of your real estate holdings and what your options are as they relate to jointly held real property. Talk with an accountant to gain an understanding of capital gains and other issues with selling the real estate.
- You may be eligible to claim social security on your spouse's earnings record. Speak to your CDFA or financial advisor when determining the best social security strategy for you.
- Educate yourself on the division of retirement benefits. Understand the differences between a “defined contribution plan” and a “defined benefit plan” as well as pre-tax and post-tax accounts. One of the largest mistakes people make when dividing assets is not considering the tax implications of their decisions.
- Life insurance needs to be discussed during financial settlement negotiations. If you’re an older divorcee, talk about the benefits of keeping existing life insurance policies in force rather than letting them lapse or cashing them out for a short-term financial boost. .
Downsizing will likely be a factor in your newly divorced state. You need to know that you can live without your significant other and possibly, without the financial support previously provided. Talk with a Certified Divorce Financial Analyst to explore your “true” financial position. You may need to make changes in your lifestyle, but know that you can get through this difficult time.
We urge those going through divorce, at any age, to not cut ties with friends and family. Do not isolate yourself from loved ones. Develop interests or partake in hobbies you may have loved but haven’t participated in recently. Stay active and involved and you will see light at the end of the tunnel.
Give us a call for help and advice on post-divorce budgeting and financial planning.