After divorce, your retirement assets might only be a fraction of what they once were. Considering the lifestyle changes and income influx that may accompany your divorce, guarding your retirement settlement should be a top priority.
Knowing how to safeguard and optimize your retirement assets can help you avoid costly losses. With the right strategies, you can prevent your divorce from negatively impacting your long-term finances.
Refrain from early spending
One of the biggest mistakes you could make is to spend your retirement money early. According to the IRS, with some retirement plans, you might get immediate access to the funds after your divorce finalizes.
It might seem fine to spend that money now, especially if you feel the strain of adapting to a single income. However, using these funds will reduce your retirement assets to nothing and leave you at square one. If you do gain penalty-free access to your benefits after divorce, immediately roll those funds into a personal retirement account.
Explore options for money growth
Explore different options and determine which type of account will best serve your lifestyle and complement your future goals. Some options may include a 401K, an IRA or diversifying some of your savings into a trusted investment portfolio.
Seeking money-growth options that will enable your money to build compound interest can help you optimize your resources. You may also consider working with a professional to guide you through developing a financial strategy that will meet your needs. With careful planning, consistent work and a proactive mindset, you can gradually rebuild your retirement savings.