Financial Rewards Of Divorce That Not Everyone Knows About
Divorce is indeed nerve-wracking and emotionally draining, notwithstanding the fact that it cuts a deeper hole in your pocket. From shelling out money for the lawyer to losing out on your spouse’s earnings, divorce is costly, without a doubt. You walk out getting deprived of your retirement savings and your assets that you have garnered all these years with your hard work. Aside from that, you go through an emotional turmoil that a divorce inflicts on you. It’s really hard for an individual to recover from such issues. However, there are some positive sides. While that can’t be a reason for you to gear up for a divorce immediately, take a look at the financial rewards that could turn things for the better.
Budgeting Becomes Easier, Giving You A Greater Control Over Your Money
A divorce means no more fights over money. Conflicts over money allotment, budget issues, and expenditure restraints will be out the window and out of your life. Every coin has two sides and divorce does bring with it freedom, the way you always wanted. But if things start getting positive for you, it doesn’t necessarily imply that it would be the same for your spouse and vice versa.
You Get Access To A Retirement Fund Earlier Than You Expected
A divorce is among those times when you can get access to your retirement money and ward off an early withdrawal penalty. When a QDRO or qualified domestic relations order is signed during a divorce, you are permitted to withdraw money from your retirement account earlier than usual. This withdrawal exempts your money from the 10% fine applicable to those individuals who are below the age of 59 years old. Having said that, you still need to pay your income tax if your money is not pushed into IRA. Cashing out a portion of your retirement account can turn out to be risky. However, it rolls out some options to an individual who has recently gone through the divorce proceedings. You can find yourself in a much improved cash flow position, to be precise. In situations when the divorce proceedings are quite amicable, people divide the retirement fund balance in the absence of a qualified domestic relations order. But, that can prove to be a mistake you may have to pay a hefty price for. Before coming to any kind of conclusion and making up tour mind, consult your financial planning advisor and your attorney.
Kids Will Benefit Financially, Too
Divorce can take a toll on a kid’s mind — it really makes life difficult for them. But, the only positive role that a divorce can play in a kid’s life is providing them with a college financial aid. Applications require basic financial details from the parent who is in custody of the child. However, the alimony and child support delivered by the non-custodial parent must be mentioned on the FAFSA.
Social Security Benefits For The Aged Divorcees
If you are a divorced individual, you can file for Social Security spousal benefits at the time of retirement. But, you can only lay your hands on the benefits if you have been in a marital alliance for a minimum period of 10 years. Young people are no more entitled to it, and older divorcees will be getting hold of half of their spouse’s benefits while postponing their own and allowing it to grow till they reach the age of 70. For people who are married, this gets implemented only if an individual’s spouse has initiated his or her own benefits. But, the rules are not the same for divorcees. After getting a divorce, you don’t need to wait until your former spouse turns on social security.
The Sunny Side
A divorce doesn’t imply that you will lose all your money. A divorced individual can structure up their assets and wealth even on a lower income. They only needs to make smart use of the available resources. Though a divorce doesn’t improve everyone’s financial condition, many people do derive benefits out of it. It may be quite surprising for some, but the reality remains the same. There are certainly some positive aspects of a divorce, especially if you look at the financial side. But it’s something you should never rush into. Never decide on anything in haste. Look before you leap.
More in Financial Advice
The Smartest Passive Income Opportunities You Can Grab This Year
Dire Straits delivered a mega hit song titled “Money for Nothing” back in the 1980s. Four decades later, can you imagine...August 30, 2018
Five Simple Ways To Be Frugal
Are you spending too much these days and need to cut cost? Well, you need to change your habit of overspending...August 28, 2018
These Money Moves Can Completely Mess Up Your Mortgage Application
When you are applying for a mortgage, you should refrain from doing things that would cause your bank to doubt your...August 26, 2018
“Lagom”: What You Need To Know About This Swedish Lifestyle Concept
Borrowing ideas and concepts from Nordic cultures for solving typical American problems has almost become a cottage industry in the US....August 23, 2018
Five Things You Should Start Doing Immediately To Increase Your Wealth
If somebody tells you that they have a get-rich-overnight scheme for you, know that they are simply trying to increase their...August 21, 2018
How NOT To Be A Spendthrift
When is the right time to spend money? This is one question that might have cropped up in your mind time and...August 19, 2018
This Is How Your Laziness Costs You Money
Laziness is one characteristic that can cost anyone heavily. In school or at the workplace, many of us might have paid...August 16, 2018
Top Five Apps For Your Investment Needs!
Investing online has become simple nowadays — all you need is an investment app. Last year, the number of apps downloaded...August 14, 2018
This Is How You Can Save BIG On Your Next Hotel Booking
So you are planning to go on a vacation? Did you book your hotel already? If you haven’t, try to recall...August 12, 2018