Financial Advice to Help Manage Major Life Events: Divorce or Death of a Spouse
Life can take a tragic turn at any moment and without warning. One minute you are sitting on the beach with your spouse and the next you are sitting along in the family home, following your spouse’s unexpected death. It’s understandable that this is a scary situation, but you are certainly not alone, as many people experience these events each year. To avoid added stress, make sure to properly secure your financial state should divorce or death of your spouse occur.
Managing Finances as a Single Person
One category that falls under both divorce and the death of a spouse is managing your finances as a single person. Whether you are no longer married, or have become a widow or widower, you will now have to create a budget that focuses on just one income. You are no longer saving for retirement as a couple. You will need to make changes in how you spend money and how you save. You might need to cut a lot of expenses from your lifestyle with such a change. You also might have to start saving more money than you did in the past.
A Change in Job
It is quite possible that you will need to change your job upon divorce or the death of a spouse. The job you once worked, which might have been to solely help you and your spouse save for retirement, won’t cut it anymore. You will now need a job that helps to pay the bills, the mortgage, the car loan, and save for retirement all in one shot. The sole reason for this is that the household is now single income.
Assess Insurance Needs
Your insurance needs will change upon divorce or with the death of a spouse. No longer will you need to have policies with your spouse as the beneficiary if you got divorced. If your spouse passed away, it’s time to update your policies to name someone else as your beneficiary. You can name just about anyone, including other family, a friend, or children.
Your tax filing status will change with a divorce or death of a spouse. Make sure you know and understand this change and when it takes effect, so that you can plan accordingly. An experienced certified public accountant will be able to review your previous tax returns filed with your spouse and advise how you should begin to file as a single person.
A New Retirement Plan
A tragedy such as the death of a spouse will cause you to change your retirement plan. The same can be said if you get divorced. There will only be one person contributing to the plan now, which changes things. Take a look at the plan that was in place when you were married and determine how it should be updated or changed completely to mirror your current situation.
Are you worried about your future? Not sure if you will be financially sound should you get divorced or should your spouse die unexpectedly? Contact Tobin & Collins at 201-487-7744 today to schedule an appointment to discuss your situation.