Mid to Late Life Divorce

 Ending a marriage? Don’t get divorced from financial reality in the process

Andrew Osterland covers the following points:

• Sound financial planning may be the last thing on your mind when divorcing but it may never be more valuable.
• “People make mistakes in the divorce process that leave them vulnerable,” said certified divorce financial advisor Stacy Francis, CFP, president and CEO of Francis Financial in New York.
• Here are five key financial issues to consider when ending a marriage.

 Five key issues to consider in divorce

1. Mediation versus litigation

2. Budget for the long-term

3. Watch your assets

4. Mind your taxes

5. Update your life   

Details at: https://www.cnbc.com/2021/11/15/dont-get-divorced-from-financial-reality-when-ending-your-marriage.html

5 Rules for Claiming Social Security Benefits After Divorce

"Even in the best of times, Social Security is a maze of complicated rules and notable exceptions. For a divorced spouse who wants to claim benefits on their ex’s record, it can get even trickier."

Here are five key rules from an advisor and a Social Security expert who specializes in divorce, by Ginger Szala. https://www.thinkadvisor.com/2021/04/02/5-rules-for-claiming-social-security-benefits-after-divorce/

1. The ex-wife making the claim will get 50% of the ex-husband’s primary insurance amount. It doesn’t matter when he claims.

2. The spousal benefit amount ‘tops up’ the claiming spouse’s own benefit.

3. The ex-husband’s Social Security benefit isn’t reduced. In fact, he may never know she’s made the claim. (works for both men and women)

4. If the ex-husband dies before FRA, the ex-wife still can claim benefits on his record.

5. If an ex-wife claims her own benefits before FRA, it reduces not only her own payout but also her spousal top-up.

Read the full details: https://www.thinkadvisor.com/2021/04/02/5-rules-for-claiming-social-security-benefits-after-divorce/

 

 

 

 

 

Getting Divorced? Don't cash out retirement accounts

Raiding Your 401(K) Can Be a Divorce Disaster

according to Stacy Francis, CFP®, CDFA®, CES™, President & CEO Francis Financial Inc.
"Many divorcing spouses find themselves strapped for money to pay for mounting legal bills and the higher costs of supporting two households, rather than one. With bank accounts and brokerage accounts drained to zero, some look to tap their employer 401(k)s or IRAs for quick cash to cover these costs."
Early withdrawals from a 401(k) or IRA can be a financial and tax disaster.
You will owe income taxes on the withdrawal and a 10% penalty if younger than 59 1/2. think about the impact of paying federal, state, local, Medicare and Social Security taxes on the withdrawal plus 10% of the total amount withdrawn.
Instead consider a loan against your 401(k). IRAs do not allow loans.
Interest rates vary by plan, with the "most common is prime rate plus 1%, which is very low, and much cheaper than credit card rates."
401(k) loans typically need to be repaid within five years, usually, directly out of your paycheck. 

Read the full article at:
https://www.kiplinger.com/article/retirement/T001-C032-S014-raiding-your-401-k-can-be-a-divorce-disaster.html 

Analyze My Divorce Settlement

"Analyze My Divorce Settlement calculates how each spouse will fare financially under any proposed divorce agreement entered into the program.  This software gets to the bottom line—how much each spouse will have to spend  based on the details in a specific divorce agreement. For households and professionals." Visit analyzemydivorcesettlement.com to learn more.

Why Your Divorce Lawyer Can’t Protect Your Finances

"Getting divorced? Be forewarned: Hiring your own financial adviser—right away—can be the difference between a workable settlement and disaster." Financial planner and estate attorney Melissa Montgomery-Fitzsimmons explains the importance of expert financial advice to supplement legal advice prior to divorce, not after the fact. See: http://time.com/money/4213623/divorce-lawyer-protect-finances-financial-adviser/

Fair Divorce Decisions

Fair Divorce Decisions http://www.fairdivorcedecisions.com/
Laurence Kotlikoff, an economics professor at Boston University, started a sideline business to sell financial-planning software more than 20 years ago. When he recently went through a divorce he used the ESPlanner software to weigh proposed financial settlements and their impact on bothspouses. Now Mr. Kotlikoff and his firm, Economic Security Planning, are offering this type of analysis to others via the website FairDivorceDecisions.com.
“The service is geared to individuals and couples undergoing a divorce as well as to professionals such as lawyers, mediators and financial planners. For $500, users get a detailed analysis of four possible divorce settlements, focusing on the living standards that the two individuals can expect for the rest of their lives. Analyses of additional proposals cost $125 each.” “Users supply information including: the spouses’ current ages and expected retirement dates; taxable and retirement-account assets; salaries; post-divorce housing arrangements and costs; and entitlement to Social Security and pensions. The analysis includes the tax implications of different financial arrangements and also strategies to maximize Social Security benefits (the subject of a separate service Mr. Kotlikoff’s firm sells).” Quoted from The Wall Street Journal, “A New Way to Reach an Equitable Divorce Settlement” Feb. 5, 2015 by Karen Damato.

When Unmarried Couples Split

Breaking up is never easy but it may be even more complicated for live-in unmarried partners. “You put your heart into your live-in relationship, but you didn't put your name on a marriage license. Now, you and your partner have separated. And while you may be glad to see your erstwhile mate leave, you'd like to hold onto your money.” Check out the advice of Holly Smith in this CNBC article: http://www.cnbc.com/id/101118532

Social Security Benefits for Ex-spouses

If you are divorced and unmarried, check out Mary Beth Franklin's article and video on claiming Social Security retirement benefits based on an ex-spouse's earnings record. The marriage must have last fore at least 10 years. http://www.investmentnews.com/article/20131029/BLOG05/131029920

10 Things Divorce Attorneys Won't Say

1. You'll pay more than the advertised rate -- way more.

2. I get sued -- a lot.

3. My lack of fiscal know-how will cost you. “Divorces often require complicated financial calculations, like projecting the long-term value of a 401(k). But finance isn't typically part of the law school curriculum.”

4. I make promises I can't keep.

5. I've only handled a couple of divorce cases. Ever.

6. Prepare for plummeting income. “Households with children in which the parents divorce and remain divorced for at least six years face a 40 to 45 percent average drop in family income, according to the National Bureau of Economic Research. Divorcing or separating mothers are also nearly three times as likely as married mothers to end up in poverty, according to a 2011 study by the Family Research Council.”

7. Go cry somewhere else

8. You may not even need me.

9. I don't have time for you.

10. I'm dragging my feet.

Read the details in: Smart Money by Catey Hill: http://www.smartmoney.com/spend/family-money/10-things-divorce-attorneys-wont-say-1339516676756/

Also: http://www.womansdivorce.com/divorce-and-money.html

http://www.divorceandmoneybook.com/

And the best resource: Divorce & Money: How to make the best financial decisions during divorce. By Dale Fetherling and Violet Woodhouse, CFP, Attorney.  http://www.nolo.com/products/divorce-and-money-DIMO.html