There is a common misconception that when you divorce, your financial health suffers. While it is important to assess your financial situation, there are also some positive aspects of divorce in terms of your finances.
When you divorce, you have control over your own finances, rather than relying on your partner. According to U.S. News, there are multiple benefits to separation.
Refresh your finances
If you had financial problems prior to the divorce, you do not have to carry the baggage with you forever. When you divorce, you can reset your priorities. For example, if you want to lower your monthly bills, but used to argue about housing, you can choose a smaller place to call home.
Likewise, if your spouse made poor financial decisions, you have the opportunity to do better. You call any investments with your money. If you have a sensible spending approach, you do not have to worry about a partner overspending.
Access your retirement fund
In typical situations, you have to pay a penalty if you withdraw from your retirement account early. A qualified domestic relations order allows you to withdraw early without the 10 percent penalty that you normally pay. If you do not roll the money into an IRA, however, you still have to pay income tax.
Benefit from Social Security
If you and your spouse remained married for at least 10 years and he or she reached age 62, you have an entitlement to those benefits. When married, you have to wait for your spouse to access his or her Social Security benefits. However, divorcees can access it before the ex-spouse does.
Once you divorce, you have an opportunity to rebuild your wealth.
