Divorce is more than a matter of the heart. It is a matter of the wallet. Regardless of income or social standing, a divorce will impact the bottom line of both people involved. People in Pennsylvania in the midst of a divorce should know what to expect and how to prepare for the financial changes that inevitably lie ahead.
Understanding and knowing the specific cash flow that will be available is vital. The best thing to do is to figure out the amount of alimony that will be coming in and any earned income. Then, the taxes must be calculated and factored into that bottom line. Also, extra expenses such as retirement funds and health insurance need to be calculated. Once this is all figured out, it will be easier to assess what is actually needed and if there is room for anything extra.
Going from a couple to a party of one affects more than the monthly bills and calculating what is needed to live month to month. Retirement will be affected. The newly single individual needs to get an idea of when he or she wants to retire and how much will be needed to do so. Lifestyle and realistic expectations may all need to be re-evaluated after exploring future options. A new system of saving or an adjustment to lifestyle may be in order to reach these goals.
The immediate and future financial pictures will all require close examination and, perhaps, a harsh dose of reality. But with a clear picture of what a divorce will mean financially, any Pennsylvania resident can start the planning process. While those financial realities and possible changes may seem overwhelming, assistance and guidance from knowledgeable professionals can help anyone decide what alimony may be needed, what investments are worth fighting for and how a property division agreement may factor into any financial decisions in both the short term and long term.
Source: forbes.com, “New Year, New You: 3 Financial Tips For The Newly Divorced“, Mark Avallone, Dec. 29, 2015