Top Money & Insurance Question

Filter by Subtopic

    Loading

    • How should I handle retirement now that I am getting divorced? I know that over 50 these issues get really complicated?

      Top Scoop

      Just remember: though you may not have “punched in”, and “punched out”, you are entitled to an equitable portion of your ex’s retirement benefits for the time you were married. When the receiving spouse is awarded a share of a qualified plan like a 401k, the spouse has two options: 1. Under IRS Rule 72T, the spouse can withdraw pursuant to divorce without any early withdrawal penalties (10%) prior to age 59 ½. However, ordinary income taxes, on the distribution, will need to be paid. When the payee takes a distribution, the plan administrator will often withhold 20% for income taxes.(this does not apply to IRA’s). 2. The payee can rollover the account to a new IRA, without incurring any penalties; though there are many reasons to keep the money in a 401(K), there are reasons to consult a financial advisor to weight the pro and cons of the two options.

      All Answers

    • Do I need to check my credit?

      Top Scoop

      As soon as you know that you are getting divorced you should get a copy of your credit report. It is important to look for any loans or accounts that you do not recognize. Also, if possible joint credit lines should be closed. Be aware that closing accounts may have a negative effect on your FICO score, however debts incurred on joint accounts by either partner will be both of your obligation for repayment.

      All Answers

    • How should I prepare financially if I know I’m going to get divorced soon?

      Top Scoop

      The first thing to do when getting financially organized is to determine what you own and what you owe. Start collecting bank statements, mortgage statements, insurance information and the deed to the house. Make copies of these items and keep them in a safe place. You may also want to consider getting a post office box you can send any important, private or legal mail. Take inventory of any valuables you have such as jewelry, art work and anything stored in a safe deposit box. Keep a log and take pictures. This will keep you organized down the road when you are trying to determine the most equitable split of your assets.

      All Answers

    • I have no idea what assets we have. Should I hire a forensic accountant?

      Top Scoop

      Each party will need to fill out a Financial Affidavit: A document to collect financial data, including all income, expenses, assets, and liabilities. Therefore, based on his information, you should learn more about your financial net worth. If your spouse owns a business, or a partner in a firm, then depending on how “open” the spouse is in revealing that information, you may need to hire a forensic accountant.

      All Answers

    • What should my priorities be in terms of finances during a divorce?

      Top Scoop

      Most retirement plans rank lower than other assets because withdrawals are taxed at the highest marginal tax rate and incur a 10% penalty until age 59 ½. Home sale proceeds always rank high on the list of desirable assets. However, you must be aware that any capital gains over 250,000/person will be taxed. Cash savings and checking accounts are the most liquid. Brokerage and investment accounts rank in-between home sale proceeds and traditional IRAs because they are available for withdrawal and only investment gains are taxed. Just remember: All dollars are not created equal.

      All Answers