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Divorce affects Social Security, retirement funds

On Behalf of | Jun 4, 2018 | divorce

Breaking up can cause financial hardship. What once might have been a two-income household is a single family household. Many aspects of a Tennessee couple’s financial life will be impacted by divorce. In particular, there are many issues connected to Social Security and retirement accounts. 

Despite the current statistics regarding divorce, many married people neglect to have a financial crisis plan for the unforeseen like divorce or losing a partner to death. This type of financial planning should make people feel more financially safe, even when their marriages are positive ones. It is better to be prepared for the what ifs in life sometimes.

If at all possible, each individual should try to save some money even if stashed cash will have to be divulged in a divorce situation. Divorce is not for the financially unprepared since there are many costs associated with the process. As well, speaking to a financial adviser as to what type of post divorce retirement account would be best, might be a wise idea. In terms of Social Security, a former spouse, at age 62 or older, is entitled to claim benefits based upon the work record of the other spouse if he or she was married for 10 or more years and single when the the application is made. A former spouse may be eligible for survivor benefits as well.

There are a few individual retirement arrangements (IRAs) those who are divorcing may wish to look into such as the less common deferred compensation plan. In any case, there are many issues that can impact a divorce financially in Tennessee. An attorney may be able to help his or her client to minimize the financial impact by offering some prudent advice.