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What are the financial advantages of a divorce?

On Behalf of | Oct 26, 2020 | Divorce |

In most divorce cases, people stress over the amount of money that they have to spend. Few recognize that there are actually financial benefits to a divorce.

Despite how you may think that you walk away from a marriage with fewer assets and less income, the truth is that your financial health can grow after you split from a partner. U.S. News lists several ways that divorce can be beneficial to your pocketbook.

More control over your finances

Financial disagreements are a common reason for stress in the marriage. Once you divorce your partner, you have free reign over your finances. You can set your own budget and start fresh again. You have the opportunity to take control of your retirement planning and to build wealth on your own.

Access to retirement funds

Typically, if you pull money from a retirement account early, you pay a penalty. During a divorce, however, there is no penalty. Early withdrawals occur when there is a qualified domestic relations order. This agreement provides one spouse with the right to receive a portion of benefits, including retirement. While you will not have a penalty for early withdrawal, you do have to pay income tax on the amount.

Access to more financial aid funds for your children

If your child wants to go to college, he or she will need parental income to apply for financial aid. After a divorce, your child only has to list one parent’s income. When he or she does this, it can increase the amount that he or she can receive.