Marriage and divorce can be messy topics from a personal perspective, let alone from a legal and financial perspective. This is especially true when your retirement or your estate are up for grabs.
A recent Forbes article titled “4 Divorce Mistakes That Can Derail Retirement” is a good hip pocket guide to help you steer clear of unnecessary missteps in Overland Park or elsewhere.
So, what is a divorce “mistake” that matters?
First, here is some perspective: you are dividing your life up at a time when your life savings are more than just a full piggy bank. There is more at stake than your dog. In fact, your life savings will be needed shortly to fund your retirement needs.
Accordingly, one late-in-life divorce mistake that will cost you big time is failing to accurately assess the value and use of the assets you share.
In brief, mistakes include:
- Automatically opting for the house over other financial assets
- Ignoring the tax implications of retirement funds
- Rolling a spouse’s retirement account directly into an IRA immediately after divorce
- Dipping too much into retirement savings because of the tax penalty waiver
Now, this list is really just the beginning. What about your estate?
Remember, divorce also threatens to your current estate and future plans for it. Are you ready for half of it to disappear?
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.For more information about estate planning and to download free tools to help you organize your estate, visit my estate planning website.
Reference: Forbes (August 21, 2013) “4 Divorce Mistakes That Can Derail Retirement”