Female members of the babyboomer generation are more confident in their finances than any other generation of women in history. Yet, in a recent survey conducted by Allianz Life Insurance on women and money, over 64 percent of divorced respondents over 50 suffered post-divorce financial crises.
There are a variety of different reasons for this, including certain financial traps that women over 50 often fall into during the divorce process. As much as you may want to avoid conflict and move on with your life as quickly as possible, take care to avoid these common mistakes:
1. Don't go though it alone.
Professionals are available to help you make good choices and you may need more than one. Your attorney will help you understand the legalese, gather and put to use pertinent financial information and documents, establish a custody agreement before anyone moves out, and plan your strategy.
You may also want to enlist the help of a counselor or therapist. It's best to keep your emotions out of negotiations, and therapy is the perfect place to vent your feelings. You might also need a realtor, financial planner, tax specialist, and/or insurance agent.
The decisions that you will make during the divorce process will likely affect the rest of your life, so you need to make sure that you are relying on sound advice and a clear mind.
2. Don't neglect long-term finances.
Your assets, liabilities, cost of living, social security and tax status will likely all change following the divorce. You may need to plan ahead for a reduced income and remember that although your current budget will change, your need to save for retirement won't.
Consult a financial expert about assets you might receive from your own or your spouse's 401(k) or IRA. You may be entitled to a qualified domestic relations order (QDRO) that allows you to take a one-time withdrawal from your spouse's IRA without penalty.
3. Don't hold back information from your attorney.
This is especially important where finances and children are concerned. Be diligent in obtaining any records your attorney requests and speak up if you think your spouse may be trying to hide assets.
You should start gathering and copying financial records as early as possible in your divorce process. You'll need copies of all property deeds, vehicle titles, debts, and bank statements. Your attorney can help you discover financial assets your spouse may be attempting to hide.
There are too many women who spend their golden years in financial ruin because of a recent divorce. You don't have to be one of these women. Work with an effective attorney who can refer you to the right professionals, protect your long-term financial interests and help you obtain what is rightfully yours.