Generally, when people think of divorce, they picture the possibility of going into financial debt and losing a significant number of assets. However, this is not always the case. In fact, a divorce can actually have some financial benefits. If you have already decided to split from your spouse, consider the following.
If you have a retirement fund, you are generally penalized for early withdrawals. However, if you and your spouse reach a qualified domestic relations order as part of your divorce, you may take money out of your account without penalty. The money taken out of your account may give you some additional options to better your financial future. You should consult with your financial planner and attorney before making any moves, and make sure not to withdraw any money without a QDRO in place.
If you have children, they only have to report the financial information of the custodial parent on their financial aid forms for college. This means that they will likely receive more financial aid than they would have if you were still married.
Another financial benefit to divorce is that you no longer have to work with your spouse to determine how to spend your money. You have full control over your own finances and can save yourself from hours of arguing. As a result of this freedom, you can take over your own retirement plan and potentially invest in equities with solid returns. Divorce gives you a fresh financial start and allows you to rethink your priorities when it comes to spending.
If you are of the appropriate age and were married to your spouse for at least 10 years, you may be eligible for Social Security spousal benefits upon retirement. These benefits are independent of your ex-spouse, meaning that you do not have to wait for them to start their benefit in order to start yours.
Nobody wants to get divorced if they can avoid it, but if you and your spouse have decided that divorce is the best thing for your family, it is good to know that there are some benefits to the process.
Source: U.S. News, "7 Little-Known Financial Benefits of Divorce," Maryalene La Ponsie, Sept. 29, 2017