Financial advisors plan an important role in many divorces. Divorce represents a fundamental change in how people will retire. However, many people fail to plan for retirement during or after a divorce. We recommend building a relationship with a trusted financial advisor as part of a divorce.
A divorce is much more than just a legal proceeding. A divorce affects every part of the spouses’ lives. When facing a divorce, almost everyone focuses on the emotional aspects of the life change. Some people also consider the legal aspects of the divorce process. But far too few people factor their finances into their plan for life after the divorce. A financial planner is a crucial part of the team of professional needed to plan a new happily ever after.
One major consideration for people facing a divorce is retirement planning. Of course, dividing retirement assets is part of a typical divorce. Each spouse usually receives a portion of the retirement accounts. However, mere possession of retirement funds should not be confused with competent financial planning. How do you know if you need a financial advisor?
How to Know if You Need A Financial Advisor
If any of the following situations are true, then you need a financial advisor:
- Your divorce decree awards you some retirement funds, but you do not have a relationship with a financial advisor.
- You and your spouse had a planner to help manage your investments as a couple. You need a new financial advisor who works for you independent of your spouse.
- You have an existing financial advisor with your spouse, but you are not manifestly happy with your existing financial advisor.
- Your marital estate is relatively large. Certified Divorce Financial Analyst create value during divorce by placing accurate values on marital assets. This person will likely be very helpful as a long-term advisor.
- Your fair share of the retirement or investment assets is going to be relatively small. You’ll need a financial planner to help you make the most of what you have. The older you are the less time you have to grow a retirement plan before you’d hope to retire.
- You won’t receive any retirement or investment assets in your divorce. Many financial advisors do not charge initial consultation fees. This is a great time to meet with someone you can grow a long-term financial relationship with. In this case, making a plan is critical, and the financial advisor will help.
Baby Boomers are getting divorced more frequently per capita than younger generations. These divorcees have precious little time to make significant changes to grow their retirement accounts or investments. Certainly, Baby Boomers (or the generation just below them) facing a divorce require a financial advisor
Millennials also need to enlist the services of financial planners. The economic reality of the modern workplace means fewer companies offer retirement plans. Those employers who offer retirement plans may not pay workers the same salary previous generation enjoyed when adjusted for inflation. Millennials also tend to change jobs more frequently than previous generations. Financial advisors provide value in this case by rolling retirement accounts from previous employers into new plans.
Stay-At-Home-Moms and Retirement
Stay-at-home moms, (SAHMs) need financial advisors during and after divorce. In speaking on this topic with many financial advisors, we have discovered a common mistake made by many SAHMs. Feedback from our trusted financial planners indicates a scary trend. Many SAHMs mistakenly find comfort is relatively small retirement accounts. A half-million dollar retirement plan seems large, but it’s not. While $500,000 is a lot of money in the hand, it is peanuts as a sum to fund 20+ years of retirement. Sadly, many retirement accounts don’t approach that much money in a divorce. We find it common to only have $50,000 in a marital estate to split between the parties in a divorce.
In the Fort Worth, Texas area, we note than many SAHMs face a real challenge in retirement planning. Frequently, the former husband will continue to earn retirement through his work after the divorce. He might even rebuild his full retirement after the divorce in a few years Unfortunately, many ladies don’t have a job that builds significant retirement assets. In this way, as SAHMs re-enter the workforce, they face many of the challenges Millennials deal with. We believe a financial advisor is a must-have professional for ladies facing divorce.
Youngblood Law, PLLC is a Fort Worth, Texas family law firm focusing on helping working people live the life they WANT through divorce and beyond. This essay is intended for educational use only, and is not a replacement for competent legal counsel. If you are facing a family law matter, we recommend obtaining competent legal counsel like Youngblood Law, PLLC. For more information contact us at 817-601-5345, find us on the web at www.youngblood-law.com. Find us on Facebook at www.facebook.com/youngbloodlawPLLC/