Forbes Names This As the Biggest Money Mistake Women Make in the Midst of a Divorce
Undoubtedly, beyond the emotional component, the next biggest concern for most couples considering or who are in the midst of a divorce relates to finances.
So have you ever wondered what many financial and legal professionals cite as the number one mistake women make when they’re divorcing?
If you’re willing to believe Forbes, that mistake is not tackling their spouses’ retirement nest egg in the divorce settlement proceedings.
So here’s how Forbes lays it all out:
First of all, the rise of what’s now dubbed the “gray divorce” is a big part of this financial problem women are increasingly facing. So what’s a gray divorce?
It’s couples who are aged 50 and over opting to go the divorce route. The older you are when you go through a divorce, the more important retirement accounts become.
That’s often for two reasons—
The first reason is because the later in life you divorce, the closer you are to retirement, but that simultaneously means you have less time to rebuild that nest egg you’ve accumulated.
Forbes goes on to say that according to a survey conducted by Securian Financial Group, of the 546 respondents who divorced after being married for 10 years or longer, more than 30 percent didn’t claim a portion of their former spouses’ retirement funds and benefits, and that’s because they didn’t realize it was an option.
Generally speaking, whatever makes up a couple’s retirement assets are fair game when it comes to divorce and it can become part of a settlement.
Forbes also lays out a few tips that can help people heading toward divorce, particularly women, when it comes to tackling this common issue:
- It’s a good idea to not only work with a divorce attorney as soon as possible, but you may also want to consider hiring a financial professional. More and more divorcing individuals are turning to the services of forensic accountants to uncover assets that could be hidden by their soon-to-be-former spouse.
- Many professionals recommend that instead of trying desperately to cling to the house in a divorce, it’s best to agree to sell it and split the proceeds while focusing your efforts on retirement. When comparing the house versus retirement, a house is most likely going to end up costing you quite a bit of money to keep it up into the future. It may go up in value but it may not, whereas retirement assets are more likely to gain value into the future.
- Another thing divorcing people should look at, particularly if they’re older, is their spouse’s social security benefits.
Ultimately every divorcing couple is unique but thinking about retirement can be a valuable way for divorcing spouses to avoid making a big financial mistake.
Your divorce lawyer can help you take a look at your options and see what’s going to work best for you in terms of a financial settlement if you’re contemplating or beginning a divorce.