Going through a divorce in Texas is likely to alter the life of an individual in many ways that are not immediately obvious. Retirement planning and saving, for example, may be disrupted by the process. Those who are approaching or going through a divorce should consider post-divorce budgeting, review retirement assets and benefits and develop a financial strategy for the future.
Depending on the circumstances of the case, it may be advisable to retain finance or other professionals to assist with the process. A financial professional or attorney may offer advice regarding the tax, investment, financial, estate and retirement consequences of divorce. Professional advice may also be useful once the divorce is finalized.
In examining the post-divorce budget, individuals must take into account the added expense of single living. Married couples enjoy shared expenses and pooled investment resources. However, following a divorce, individual expenses may increase dramatically at the same time that funds available for saving or investment are reduced. Spending should be tracked diligently for at least the first few months so the budget can be reset and retirement saving readjusted.
Retirement assets, including 401(k)s and IRAs, should be inventoried prior to and following a divorce to ensure that they continue to meet individual goals. Social Security retirement and other benefits may also be impacted. A retiree divorcing after being married for 10 years or more, for example, may be entitled to collect Social Security benefits based on his or her ex-spouse's contributions.
The development of a financial strategy for the post-divorce future must begin with an honest analysis of funds and limitations. Those who have questions about the process may want to obtain legal advice. An attorney with a background in family law matters may be able to help individuals understand the treatment of retirement accounts and other property under Texas divorce law.