A divorce can dramatically affect a person’s finances both in the short term and the long term. Coupled with the emotional challenges of divorce, this type of family law proceeding can be complicated and overwhelming for individuals in Illinois. A few tips may help people going through a divorce make wise financial choices in order to protect themselves during and after a split.
A married couple has the benefit of splitting their living expenses and pooling their investment assets, which includes retirement accounts. However, after a marriage has been dissolved, it may be hard for the newly single individuals, who now have separate households, to stay on track with their retirement. The choices a person makes during a divorce when dividing joint retirement assets with a soon-to-be-ex has a direct impact on an individual’s ability to reach his or her retirement goals.
When negotiating the split of retirement assets, it may be wise to enlist the help of a finance professional. These individuals can offer advice related to retirement, estates, taxes and investments. It is also important for a divorcing person to create a new budget based solely on his or her income and develop a practical strategy to save for retirement based on his or her new budget.
Negotiation can be an effective way for two people going through divorce in Illinois to reach a settlement that will benefit them both financially in the long run. However, if the two individuals are unable to set their differences aside at the negotiation table, a judge will have to get involved and ultimately decide for them how their retirement and other assets are to be split. Both parties have the right to pursue their fair share of assets during a divorce proceeding.
Source: logandaily.com, “Personal Finance: Resetting your retirement after divorce“, Jason Alderman, April 14, 2015