Most people are not born independently wealthy so saving for retirement is a part of budgeting. Ideally married couples work together to save money for their old age. They know exactly how much the other has and they know how it has been invested, right?
Fidelity Investments recently published the 2015 edition of it’s online biennial Couples Study. Surprisingly, the study showed that although many couples think they communicate well about money 40% of the couples surveyed didn’t know how much money their spouse made the previous year.
Sadly, the study also showed that over 50% of the couples did not know how much money they would need in retirement to maintain their current standard of living. What does this have to do with divorce? Imagine how difficult it would be for someone to ask for a fair settlement in a divorce if they don’t know how much money their spouse made or how much money they needed to maintain their current standard of living?
Investment companies like Fidelity help people improve their understanding of the family finances. A good place to start is taking an active role in understanding the tax returns or reading the credit card bills. When someone is getting divorced or thinking about getting divorce, and if they have never managed their own finances before, it is a good idea to look for an investment firm and financial advisor to help.
From the perspective of a divorce attorney, it seems that often times one spouse is more prepared than the other. Generally people don’t plan their divorce, and often end up with a lack of financial literacy. When a person receives a large settlement and is responsible, for the first time in many years, for paying the bills solo then financial literacy has real implications for the future.
In New York and many other states a person is entitled to half of their spouse’s IRA, 401K, or other retirement investment if they have been married at least 10 years. There are also statutes now which determine temporary and permanent alimony payments and child support. At Jones Morrison, we can help teach financial literacy and provide the financial and litigation support necessary to successfully navigate the future.