Even when we don’t talk about it often, most couples across the world certainly argue on one common thing at some point in life: finances. Hence, when they are split, there certainly are some financial benefits of divorce.
When the couple splits, you might worry about making the ends meet as the income will obviously be slashed to half. However, there are certain financial benefits as well that create the silver lining.
Here are some of the significant financial benefits of divorce
More control, fewer fights
The end of a relationship means the end of fights over money. Now, you do not need to prioritize and spend on non-personal expenses, hence giving you more control over money.
So not only does it mean freedom from financial disputes, but also now you can build up more savings for yourself and paying off debt. This will enable you to do things that you love as well: like traveling more and treating yourself better.
Early, penalty-free withdrawal of retirement fund
Divorce is among a few reasons that allow you to withdraw money from retirement funds without any penalty, according to qualified domestic relations order agreement. This amount is exclusive of the 10% penalty assessed to those younger than the age of 59 years, however, the tax still levies.
Better investment returns – especially for women
Some financial benefits of divorce generally are pro-women. According to industry experts, men take a more aggressive approach to investments and take more risks. On the contrary, women pursue more thought-out financial decisions.
According to an analysis report by Fidelity Investments, women are less likely to fully invest in equities and hence were noticed to earn marginally better gains than men.
After divorce, women also get the independence to plan out their retirement planning, which is financially rewarding in the longer run.
Increase in financial aid for kids
Divorce can be an emotionally challenging affair for the children, however, one sphere that will most likely be eased out for them is college financial aid. The Free Application for Federal Student Aid only asks for details of one custodial parent rather than both. As the divorce lowers your income, it can be termed as one of the financial benefits of divorce, as it puts your kid in a better position to get financial aid.
Social security benefits for old divorcees
If the couple decides to split their paths at an older age, they can file for Social Security Spousal benefits. You are eligible for these benefits if you have been married for over 10 years, and your spouse is over the age of 62 years.
In the case of married people, the partner has to wait for the other to claim these benefits. While in the case of divorcees, this is not the case
Also, claiming the social security will neither affect your ex’s income nor yours, even if you remarry.
While divorce can be difficult, these financial benefits of divorce can actually lead to more independence and a better lifestyle in the longer run.
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