No matter how you look at it, divorce is often a stressful and intimidating process. Perhaps you are closing in on retirement age. If you and your spouse choose to part ways, you might have growing concerns about the potential financial ramifications of a grey divorce.
For those nearing this point in life, financial standings are often paramount to the road ahead. Although the divorce will likely have an impact on your finances, there may be certain measures you can take that could help you avoid a disruption in your plans for retirement.
Taking precautions to secure a healthier financial future
Although the end of a marriage is often fraught with emotion, making level-headed decisions, despite the difficulty, will likely prove extremely beneficial in the long run. Some crucial tips that may help you on the road ahead could include the following:
- Asset awareness: On the surface, certain assets, such as a home, may appear more appealing than others. However, if you take the time to become aware of not only the value, but the potential future costs of upkeep for such assets, you might be more prepared to pursue a favorable outcome when entering negotiations.
- Potential tax ramifications: There are numerous types of retirement accounts, each of which may be subject to varying tax ramifications, and awareness of this factor could prove exceedingly beneficial moving forward.
- Hasty decisions: Although you may be eager to separate your life from your former spouse emotionally and financially, making hasty withdrawals or transfers from certain accounts before obtaining a divorce decree could have undesirable consequences.
- Consider a budget: Following divorce, the tax penalty for removing retirement funds from certain accounts may be waived, but instead of withdrawing extra money from accounts, you might want to consider the alternatives, such as forming a budget, to keep retirement funds and plans intact.
Since Pennsylvania is an equitable distribution state, the division of assets must be fair but does not have to be equal. With numerous areas to cover and the potential weight of your decisions, you might find it helpful to seek advice on how to proceed.
Advice for the road ahead
With the potential of transitioning from a two-person income to one and the likelihood of the division of retirement funds, you might be worried that you will have to move your plans back to accommodate these changes. However, dissolving your marriage might not necessarily have to disrupt your current path.
You could choose to retain the services of someone with experience in the area for guidance on the road ahead. Obtaining advice and assistance throughout this period could prove exceedingly beneficial to pursuing the most favorable outcome possible, which may also relieve some of your worries and help you continue toward retirement with peace of mind.