Does Divorce Offer Financial Benefits?

Most couples look at divorce with concerns about its impact on their finances. Spousal support and asset division can affect both parties negatively.

However, many people actually experience an improved financial outlook after ending their marriages. U.S. News & World Report explains a few of the surprising financial benefits of divorce.

Access to Social Security benefits

Regardless of current marital status, some exes can receive Social Security benefits from their former spouse. If your marriage lasted for ten or more years and your spouse is 62 or older, you can claim benefits. Additionally, you can claim benefits even before your spouse claims them, as long as the above criteria are in place. This is not the case with married couples, who must wait until the eligible party files for benefits.

Early withdrawals from retirement funds

Withdrawing money from a retirement account before age 59 1/2 incurs a 10% penalty in most cases. However, early withdrawal is not penalized when couples have a qualified domestic relations order. Additionally, divorced couples drawing from an IRA will not have to pay income tax on the withdrawals. Splitting retirement accounts ensures both spouses have a safety net as they grow older.

More control over your money

Financial issues between spouses are a common factor in many divorces. If one spouse spends more and is less focused on saving, the other can feel incredibly frustrated. After divorce, a person is completely in control of their personal finances. They can make decisions in their best interests and work towards paying down debt and improving their credit score.

Divorce allows people to start over in numerous ways. In spite of the emotional and financial effects, it can provide a clean slate to start over and focus on your best interests in the future.

Related Posts
  • Estate Planning for Blended Families: Navigating the Unique Challenges and Ensuring Fairness Read More
  • What Can I Do If I Can’t Afford Child Support? Read More
  • Should I Wait to File for Divorce Until After the Holidays? Read More