One of the things people facing divorce fear the most is the financial impact on their lives. You are losing the support of your spouse and half of your marital assets.
However, divorce also comes with a few financial benefits. Avoid the negatives. Take advantage of your situation to better secure your future.
You are in charge of the present
When the dust from your divorce settles, you are in control. You set spending priorities. You no longer need someone else’s approval when making financial decisions. That means no more fighting over money.
One option is withdrawing money from your retirement account early. When you are getting a divorce, there is no penalty for this withdrawal. The decision comes with some risks, but again, it is yours to make. The money can set you up for your post-marriage life.
When it comes to investing, a Fidelity Investments analysis showed that women typically make better investment choices after a divorce than men. Men can be too aggressive, taking risks to try to make up for any losses from the divorce.
You are in charge of your future
Believe it or not, divorce can have a positive impact on the financial future of your children. College aid applications call for information about the custodial parent, not both parents. Financial aid does take into account child support and alimony.
Some decisions are difficult yet positive in the long run. Consider giving up your large house for a smaller house or an apartment. Such a move can have both short-term and long-term financial benefits.
Older divorced spouses can file for spousal Social Security benefits. You qualify when you reach full retirement age and if your marriage was for at least 10 years. You can receive half of your spouse’s benefit without drawing on your own until you reach 70.
Life goes on, even after a divorce. Do not focus on what you have lost. Concentrate on what you have and your goals.
You can overcome the financial challenges through careful planning. The key is making smart choices.