When a Texas couple goes through a divorce, the net effect can be a significant reduction in each spouse’s financial standing once the divorce settlement is complete. This does not have to be the case for every divorcing couple, however, and there are a number of measures that can be taken to minimize the financial fallout of a divorce. Most people who are newly divorced want to focus on rebuilding their finances, and making the best decisions during the divorce process can provide a head start toward that goal.
One recent survey finds that the average individual coming out of a divorce holds approximately $10,000 less in retirement savings than married persons. Women, in particular tend to fare poorly, falling on average 41 percent from the level held during the marriage. These factors make it imperative to remain focused on the financial aspects of the divorce process in an attempt to mitigate losses in savings and income.
One important consideration lies in how existing retirement accounts are to be divided. While many spouses focus on retaining the family home, many financial advisors recommend putting a priority on determining which party will retain all or a portion of the retirement savings. Fighting over the family home is often an emotional decision, but the high carrying cost and risky real estate markets can make this a hollow win.
When going through a divorce, there are an astounding number of decisions that must be made. Many of these choices can have long-term consequences, especially in regard to an individual’s financial stability. In most cases, it is a good decision to sit down and identify the financial pros and cons of each significant decision before moving forward. Doing so can make the process of rebuilding financial security much easier in the months and years following a Texas divorce.
Source: CNN Money, “Rebuild your nest egg after divorce,” Beth Braverman, Donna Rosato and Penelope Wang, Feb. 21, 2013