5 Financial Planning Tips for People Going Through a Divorce

Divorce can be a difficult and emotional process at any age, but it can be especially challenging for those who are 55 and older. Along with the emotional toll, financial considerations also need to be addressed.

1. Understand the Financial Impact

Divorce can significantly impact your finances, especially if you are close to retirement age. It’s important to understand how your finances will be affected by the divorce and come up with a plan for moving forward. This may involve creating a new budget, reevaluating your retirement plans, and adjusting your investments.

2. Seek Professional Help

It’s important to work with a financial advisor and a divorce attorney with experience working with those in or near retirement. They can help you understand the divorce's financial implications and ensure you are protected during the process.

3. Consider Your Retirement Accounts

If you and your spouse have retirement accounts, such as 401(k)s or IRAs, they often will need to be divided in the divorce. This can be a complex process, so it’s important to work with a financial advisor and tax professional to ensure that the division is done correctly and in a way that minimizes your tax liability.

4. Update Your Estate Plan

After a divorce, it’s also important to update your estate plan to reflect your new circumstances. This may involve changing beneficiaries on your life insurance policies and retirement accounts, updating your will, and creating a trust.

5. Take Care of Yourself

Divorce can be emotionally and physically draining, so taking care of yourself during this time is important. This may involve seeking counseling, practicing self-care, and leaning on family and friends for support.

At Vector, we know that divorce can be a difficult and emotional process, but it’s important to understand the financial implications and seek professional help.

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