Divorce Can be Difficult, But There are a Few Financial Silver Linings to It
Divorce is emotionally draining and nerve-wracking and besides, it cuts a deep hole in your pocket. From paying the lawyer to losing your spouse’s earnings, divorce is very costly. You are deprived of the retirement savings and assets carefully built up over the years with hard work and the divorce proceedings inflict much emotional turmoil. It’s really difficult to recover from such issues but there are also positive sides. While that is no reason to commence divorce proceedings, some financial rewards can accrue.
Easier budgeting with better monetary control
A divorce ensures zero fights over money. Conflicts over funds allotment, budget issues, and expenditure controls will vanish overnight and divorce does bring freedom the way you always desired. If positives accrue for you, it doesn’t imply that the same benefits go to your spouse.
You access retirement funds earlier
A divorce is among those times when you can access your retirement money and ward off early withdrawal penalty. When a QDRO (qualified domestic relations order) is signed during the divorce, you can withdraw money from your retirement account earlier than usual. This withdrawal exempts the 10% fine applicable to those persons below the age of 59 but still pay income tax if your money is not held up by IRA.
Cashing out from your retirement account is risky but there are options available for those affected by divorce proceedings. You have a much better cash flow position. When divorce proceedings are amicable, people divide the retirement fund balance in the absence of a QDRO. But that may be a costly mistake for you. Before making up your mind, consult both your attorney and financial planning advisor.
Kids, too, benefit financially
Divorce can affect a kid’s mind and makes life very difficult for them. But, a divorce can enable starting much-needed college financial aid. These applications require only basic financial detail of the parent maintaining custody of their child. But child support and alimony delivered by the parent who does not have custody, has to be declared on the FAFSA.
Social security benefits for aged divorcees
As a divorced individual, you may file for Social Security spousal benefits at the time of retirement but can lay hands on benefits if married for a minimum period of 10 years. Young people are not entitled to the funds and older divorcees could secure half of their former spouse’s financial benefits while delaying their own and permitting funds to accumulate till they reach 70. For married people, this can be only implemented if the individual’s spouse was the one who initiated their own benefits. But wait, these rules don’t apply to all divorcees. After finally securing a divorce, you are not obliged to wait around until your ex can access social security benefits independently.
Sunny side up
A divorce doesn’t imply that you lose your money. A divorced person can re-structure the assets and wealth with lower income but with smarter use of available resources. A divorce may not improve everyone’s financial condition, but many do derive benefits. Though quite surprising for some, the reality remains the same with some positive aspects of a divorce, especially from the financial angle. But it’s something not to be rushed into.
More in Investments & Savings
Kim Kardashian Fans Reveal the One Inspiring Quality that Made Them Admire Her Despite Her Past
Kim Kardashian has earned her fair share of haters and critics over the years. Fortunately, they’re balanced out by the many...July 2, 2021
Exclusive: Everything That Scarlet Johansson Splurges On
Scarlett Johansson is one of the biggest stars in the entertainment industry. She calls the shots on screen and off-screen with...July 1, 2021
All Those Paris Hilton Scandals Make Her Family Reconsider Her Inheritence
The media personality’s antics, that Paris Hilton was up to ages ago to come into the limelight, have had a huge...June 30, 2021
Super-Rich People Spend Money In Ways That Us Plebs Cannot Comprehend – I
We know the Lannisters pay their debts and Uncle Scrooge enjoys diving into his ocean of money. But how do super-...June 29, 2021
How do Celebs Celebrate Their Birthdays? By Being VERY Extra, Apparently
Have you ever wondered what birthday party you would throw for your friends and family if you suddenly possessed a large...June 28, 2021
All You Need to Know about the Fall and Return of Iceland’s Sole Billionaire
To be among the wealthy places you in an invincible position. Reviewing the wealthiest celebrities today, will any of them ever...June 25, 2021
The Newest Crowdfunding Success is the New Segway Ninebot Scooter. And We Wish We had One, Too!
The KickScooter F Series was fully funded within 10 minutes of its campaign launch on Indiegogo and an outstanding success not...June 24, 2021
These Historical Tours Broke All Records and Made Millions
The lives of musicians today are vastly different from before, due to the proliferation of streaming platforms and social media access....June 23, 2021
Want a Celebrity Endorsor to Boost Your Brand’s Value? Here are Things You Need to Consider First
To get a new company off the ground, the idea of getting a celebrity endorsement for your product or service can...June 22, 2021