Regardless of your age, divorce requires extreme attention to detail when it comes to your finances. This includes your assets, debts and retirement income, among other details.
When divorcing in retirement, which has become more common, it's imperative to understand the steps you can take to protect your retirement income.
Here are three things you can do to stabilize your financial situation during and after divorce in retirement:
- Think about where you'll live: For example, you may be tempted to fight to stay in your home, but this may not be the best option at this stage of your life. You may be better off agreeing to sell the family home, which will give you access to proceeds from the sale. You can then use this money to generate income in your retirement years.
- Income is a must: Since you're not working in retirement, you must have means of generating enough income to sustain your lifestyle. Keep this in mind as you're negotiating your divorce terms. For example, if you give up retirement asses, such as an IRA account, in exchange for real estate, it could work against you in regard to having a steady income.
- Follow through with the division: While your divorce decree outlines who gets what, that's only the start. You and your ex-spouse still have to carry out the process, and this is something you want to do immediately. For example, if you're owed money from your ex-spouse's 401(k), you don't have any control over how it's invested until it's in your hands. The sooner these details are taken care of, the sooner you can move forward with your life in Texas.
Divorcing in retirement will bring many challenges to your life, some of which are directly tied to your finances. Fortunately, when you take the right approach during the process, you will feel confident in the decisions you're making and where you'll end up when the process is complete.
While you won't receive everything you want in your divorce, do whatever it takes to protect your legal rights. It's the decisions you make now that will impact you as you live out your retirement years.
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