Aside from suffering emotionally, many Massachusetts couples who are ending their legal union will also experience a difference in their financial status, as one household becomes two. In addition to having only one income to support themselves on a daily basis, many people find that divorce has significantly affected their retirement savings plan. However, to help ease the process of achieving financial independence, divorcing couples can benefit from the following advice.
In some cases, each party in a divorcing couple will have about the same value in retirement savings, and in this situation, they may decide to simply go their separate ways with their own personal accounts. However, in many cases, one person will have more savings than the other. The individual with less money saved may negotiate for a portion of the ex-spouse’s savings, although he or she can claim only savings accrued during the marriage. To legally transfer retirement assets from one party to the other, the person transferring will likely need a qualified domestic relations order (QDRO). One person may also be able to claim some of the ex-spouse’s pension.
Many divorcing individuals will have to create a new retirement plan once they are on their own. People in this position should first have a clear picture of their living expenses; they can then use a retirement calculator or other means to come to an estimate of how much they will need to save each month. A divorced person may need to consider making adjustments to help him or her reach a retirement goal, such as cutting back on monthly expenses and/or rethinking his or her planned retirement date. In addition, some people exiting long-term marriages (10 years or longer) may be eligible to claim Social Security benefits on their ex-spouse’s work record, provided they meet specific criteria.
Typically, divorcing individuals will encounter numerous obstacles and challenging moments along the path to their final divorce decree. Many Massachusetts couples going through the stresses of the divorce process will attest to the fact that financial adjustments are a common contributor. However, many people in this position find help with tips such as these, sometimes along with the guidance of a financial advisor. In addition, an experienced family law attorney can provide valuable legal advice through all aspects of the divorce process.