While divorce obviously has the capacity to drastically change an individual’s day-to-day life, the long-term implications of a separation are not always closely scrutinized. Connecticut residents facing divorce are reminded that, depending on their unique situation, a divorce could have ramifications for their long-term life plans as well. Issues such as retirement savings and benefits should not be ignored when approaching the topic of a marital separation.
Generally speaking, it is recommended that the average worker save roughly five times his or her salary by the age of 55 to effectively prepare for retirement. If this goal is pursued by a couple that later divorces, this can throw a monkey wrench into even the most comprehensive retirement plan. When assets like 401k and other investments are split, this can leave both individuals playing “catch up” to prepare for their retirement.
Reallocating resources after a divorce can also be a complicated process. The process itself and the associated life changes can cost a certain amount of money right out of the starting gate. However, preparing adequately in advance and taking a close look at how assets and debts will be divided is a good way to enter a new single life from a strong financial standing, even if the assets themselves are less plentiful than they used to be.
Divorce can be a challenging and complicated process, as some Connecticut residents are already aware. However, it is possible to prepare for a divorce and its long-term effects on finances with the necessary information on hand. Seeking out support in understanding this information can be helpful to both parties involved in a divorce situation.
Source: marketwatch.com, “Picking up the financial pieces after a divorce”, Chuck Jaffe, April 3, 2015