The proceedings are over; the divorce is final. Independence after a long marriage can be exhilarating, but it may also come with significant financial changes.
Knowing some of the monetary benefits of divorce can help arm an individual with the knowledge to manage the new changes. Though divorce may feel like a nightmare, waking up to these three advantages can help see the newly divorced into his or her economic future.
Better financial aid for children in college
Divorce is never easy for children, including those just starting college. However, a child with recently divorced parents may be eligible for more government assistance. The U.S. Department of Education has specific guidelines for which parent fills out the Free Application for Federal Student Aid. Though the parent must include any alimony and child support on the FAFSA, a child may receive more aid depending on the income of just the custodial parent, not both.
Penalty-free access to retirement savings
After a divorce, it is possible to withdraw from retirement funds without paying an early withdrawal fee. An agreement upon a qualified domestic relations order by the divorcing parties is one of the few times a person can cash out part of a retirement account without a penalty. Withdrawing part of a retirement fund could be risky but may provide a newly divorced person some immediate cash flow.
Social Security Perks
According to the Social Security Administration, older divorcees may be eligible to receive Social Security spousal benefits. If the marriage lasted at least ten years, unmarried ex-spouses could receive extra funds upon retirement, depending on lifetime income.