Many couples in relationships or marriages cite money problems as their biggest source of tension, with research indicating that over a third of them deal with this issue. In some cases, that pressure pushes a once-content partnership straight toward separation and legal proceedings. Sure, splitting up can create money woes, like suddenly handling bills on a single paycheck, but it isn’t all bad, there are some real upsides financially. Let’s break down seven ways divorce might actually boost your wallet:
- Easier Budgeting and Total Control Over Your Money: After the split, you’re flying solo on finances, which means no more haggling or checking in with someone else before spending. You get to craft a budget that fits your life perfectly, focusing on what matters most to you without any outside opinions getting in the way.
- Penalty-Free Access to Retirement Funds: Some divorce agreements let you tap into your former partner’s retirement accounts, like a 401(k) or IRA, without the typical fees for pulling money out early. This often happens through something called a Qualified Domestic Relations Order (QDRO), giving you a handy cash boost to ease into your new chapter.
- Better Shot at Investment Wins: When assets get divided, you might end up with a chunk of cash or stocks to invest as you see fit, matching your own comfort level with risk. This freedom could open the door to smarter, more personalized moves that yield higher returns than the safe or mismatched choices you made as a couple.
- More Help with College Costs for the Kids: Being a single parent can change how financial aid is figured for your children’s higher education. Forms like the FAFSA usually only look at the income of the parent the kids live with most, which could mean less expected family contribution and more access to grants, scholarships, or loans.
- Extra Social Security Perks for Individuals Over 62: If you were married for a decade or more and haven’t tied the knot again, you can claim benefits based on your ex’s work history starting at age 62. That’s especially helpful if they earned more, potentially giving you a bigger monthly check than you’d get from your own earnings alone.
- A Fresh Look at Your Money Goals: Going through a divorce is a natural time to hit pause and rethink your financial roadmap. You can tweak things like saving for retirement, picking investments, or building an emergency fund to better suit where you are now and where you want to head, making your plans sharper and more on target.
- A Net Gain in Your Financial Health: The early days post-divorce can feel tight, but for many, it ends up being a step up in the long run. Between splitting up debts and assets, plus possible support payments like alimony or child support, you could land in a steadier spot overall.
On top of that, ditching the expenses tied to a rocky marriage, like couples therapy sessions, frees up more cash. Divorce is tough, no doubt, but in these ways, it can spark real financial freedom and smarts, helping people bounce back even stronger.
Pre-Divorce planning requires that you get your finances Wright so consult with an qualified attorney like the ones at Wright Family Law Group in order to get the full picture of what to expect. Contact us today at 978-773-9260 or contact us online to book a free Discovery Call.