Finding yourself facing divorce later in life brings about unique challenges. While you may not have child custody issues to consider, the wealth you have accumulated may take center stage.
There are some common missteps you may make when trying to set yourself up financially after divorce. Discover some of the ways you may inadvertently sabotage your financial future during a divorce.
You do not consider retirement plans
Retirement savings accounts may swell as you approach and reach the end of your professional career. When you divorce, retirement savings accounts are divided. This may mean an early withdrawal, which may leave you with tax penalties. You may want to consider utilizing other assets to pay your spouse’s proportionate share of retirement accounts.
You try to stash cash
When you decide that divorce is imminent, you may want to open new accounts to maintain a steady flow of cash. Judges do not look kindly on people of any age trying to hide assets before a divorce. While it is a good idea to establish your own accounts, make sure you do not take too much of the marital pot to do it.
You do not account for health insurance
The cost of health insurance and healthcare is rising, and those over 50 are taking a hit. You may need to consider the implications of your divorce on your health insurance, especially if your spouse carries you. If you have a preexisting condition that makes getting new insurance difficult, you may need to pay for a COBRA plan. The cost of continued healthcare is often not taken into account during divorce until it is too late.
A divorce does not have to leave you high and dry. Having a better understanding of common pitfalls may help you avoid them.