Planning for a divorce is something of a contradiction in terms, considering most people who choose to be married likely do not intend for that marriage to end in separation. However, Texas residents who have experienced divorce can attest that once the decision has been made to end a marriage, planning for things like division of property can become of paramount importance to both individuals. The long-term implications of income and property splits, particularly as they pertain to retirement, will be of interest to both parties.
Depending on an individual's retirement plans, external to 401k investments and other considerations, it is generally recommended that a person save the equivalent of five times his or her salary by the age of 55 in order to be fully prepared for a full retirement. However, when this plan takes into consideration a dual income that becomes halved by a divorce, this plan can change drastically. Division of property and assets can set both individuals "behind the curve" when it comes to savings.
One of the most important steps both individuals can take toward preparing for their smaller, less-complete portfolios is to approach the question of asset and property division in a fair way. The specifics of this process can differ from state to state, so it can be beneficial for both parties to be aware of their home state's laws around such divisions. Being prepared in this way can smooth the financial road for both parties.
Divorce can change the course of people's lives for the better. However, Texas residents are reminded that issues like division of property and assets are rarely simple. Seeking out support to broach these difficult topics can benefit both individuals and set them both on a path toward financial stability in their new, single lives.
Source: marketwatch.com, "Picking up the financial pieces after a divorce", Chuck Jaffe, April 3, 2015