Keep Your Nest Egg Safe Through Divorce

Women are generally the financial victims in divorce. They tend to lose as much as 41 percent of their income after the property division is complete. In comparison, men only experience a 25 percent drop. Women should be better prepared to negotiate for their financial futures during divorce, so experts are now releasing strategies that can promote financial success for female divorcees in Maryland and elsewhere.

Even though divorce and family changes put a significant amount of worries on your plate, you should remain focused on keeping beneficial assets and seeking fair property division. Experts say that women often settle for undervalued holdings that will do little to help them in the long-term. 

Instead of looking to secure the family home, for example, push to get a percentage of the retirement funds you have both been establishing. Houses require capital to repair and maintain, while most retirement funds are relatively inexpensive. That illiquid asset could weigh down a woman’s financial future while taking away her safety net.

Take care of your portfolio choices by converting pensions and 401(k) funds to IRAs. This generally gives you better investment options. Remember that you can still wisely invest even without your spouse’s help. 

If your husband has been managing the investments, you may feel as though you are experiencing a steep learning curve. Never fear, because investment professionals are available to help. Consider investing in a fixed-date fund that would allow you to consider other investments while still earning.

Finally, if you decide to remarry, you need to draft a prenuptial agreement to protect your assets for your own children. Prenups tend to be more common in second marriages for just this reason. Even though you may be preparing for your children’s financial needs, you can still work together as a couple to benefit the family.

Experts also advise that recent divorcees take time to evaluate their investments. Do not rush into any investment or asset management plan. Instead, take several months to deal with the emotional and financial impact of the loss before you decide how to manage your money.

Source: CNN Money, “Rebuild your nest egg after divorce,” Beth Braverman, Feb. 21, 2013