Going through a divorce can be one of the most difficult experiences at any age, but for a growing number of retirement aged couples, this is how they are beginning the next phase of their life.
My name is Brenda Rolli, an Accredited Asset Management Specialist with Provident Financial Consultants. I am going to share some practical financial steps to take as you plan for your financial future after your split.
- Oftentimes, one spouse may have taken care of the majority of the finances, if you weren’t part of the conversation, it’s time get clear about your investment goals. Develop a new strategy to help achieve these goals by assembling a team of financial professionals to help you.
- Create a budget. Your income and expenses have probably changed quite a bit. Understanding your cash flow is important.
- It’s time to get your own individual insurance coverage. Whether that be health, car, life, homeowners, etc. While you are updating all of this, don’t forget to review beneficiaries. Your financial professional can be a great resource; whether it be your life insurance, retirement accounts, they will help guide you.
- Taxes and filing. If you will be divorced before the end of the year, you may need to change your tax withholding. Once divorced, you will file as single. If you are not yet divorced you can file your last return as married filing separately. Divorce settlements after 2019 have new tax implications regarding alimony. These payments are not taxed nor are they tax-deductible.
- Divorce can also impact social security benefits. If you were married for a t least 10 years, a lower earning spouse may continue to be entitled to claim benefits based upon the higher earning spouse benefits, IF you do not remarry before age 60.
I know divorce is uncomfortable to discuss, and there are so many more considerations than what I went over today. If you have questions, you are welcome to reach out and we can review your specific circumstances together.