When a separation takes place, it is sometimes easy for individuals to be caught up in the moment and look forward only to the end of the proceedings. But Illinois couples facing divorce are urged to consider their futures as single people, particularly as that future relies upon retirement funds and pension plans. Divorce can take a profound toll on late-life planning, according to experts, and the best way to mitigate that effect is to be prepared well in advance.
As mentioned, it is tempting to think in terms of the “here and now” when going through a divorce. Quite often when couples are dividing marital assets, the tendency is to liquidate all existing assets into readily-available cash for immediate use. However, that sometimes leaves one or both parties lacking in retirement funds as pension plans are among the assets available for liquidation.
Additionally, it is common for people to become overly attached to assets that should, in fact, be liquidated ahead of important savings bonds. Cars and other physical properties with a measurable shelf life of usefulness may be a better choice for liquidation than hard-won savings that can help provide a comfortable retirement to each party. Ultimately, planning and forethought are the lynchpins of successful post-divorce life.
There is no denying that divorce can be emotionally and, at times, fiscally costly. However, it is possible — and important — for Illinois residents to cut down on the fiscal portion of that cost by ensuring they are prepared for their single futures. Securing a retirement plan — even at the expense of current convenience — is often the smart bet.
Source: Forbes, Northwestern MutualVoice: Saving Your Retirement From A Divorce, Greg Brown, Oct. 21, 2013