When discussing divorce in Wheat Ridge and Jefferson County, often the negatives and emotions are the focus of the conversation. However, there are some financial benefits for those getting divorced. The reason that we discuss these benefits is because it can help make a difficult situation a little easier to handle.
Potential Financial Benefits of Divorce in Arvada and Golden
Reassess Financial Priorities
While it can be difficult to go through major life changes, divorce can also provide the opportunity for you to reassess your financial priorities. If you see the situation as a chance to reset and start over, you can set new financial goals to work towards. Learn from previous financial mistakes and move forward in a positive way.
Access to Retirement Funds
There are only a few times when you can take money from a retirement account early without paying penalties and divorce is one of those situations. If during your divorce, an agreement is made where a party can withdraw early from the retirement account (as documented through a QDRO – qualified domestic relations order). Taking some of your retirement penalty free will allow you to replenish some of the funds that may have been lost through the divorce and let you financially start of on the right foot.
When married, you likely filed your taxes jointly with your spouse. This may have put you in a higher tax bracket, meaning that you were paying more in taxes. When you file individually, you may qualify for a different tax bracket, which could save our thousands in taxes.
Social Security Benefits
If you and your spouse were married for at least 10 years, then you may be eligible for spousal benefits through Social Security during retirement. You may be entitled to get half of your former spouse’s benefits and defer your own benefits.
Financial Aid for College
When your children are getting ready for college, likely they will fill out the FAFSA (Free Application for Federal Student Aid) form in order to apply for financial aid. This form only requires the financial information for one parent. Your child can provide the information for the parent with the lower income and therefore may be able to receive more financial aid.