[et_pb_section fb_built=”1″ admin_label=”Image Section” _builder_version=”4.6.5″ _module_preset=”default” background_image=”https:\/\/springwaterwealth.com\/wp-content\/uploads\/2020\/08\/Independent-Women-Planning-for-Retirement-Springwater-Wealth-Management.jpg”][et_pb_row admin_label=”Image Row” _builder_version=”4.6.5″ _module_preset=”default” custom_padding=”112px||365px||false|false”][et_pb_column type=”4_4″ _builder_version=”4.6.5″ _module_preset=”default”][et_pb_text admin_label=”Image Text” _builder_version=”4.6.5″ _module_preset=”default” header_font=”Roboto Slab||||||||” header_text_align=”center” header_text_color=”#ffffff” header_font_size=”60px” header_line_height=”1.8em”]<\/p>\n
<\/p>\n
<\/p>\n
<\/p>\n
Financial planning for women is different from financial planning for men and so is retirement planning. Why?<\/p>\n
Well, a longer life expectancy means that you\u2019ll have a greater risk of outliving your retirement savings. But there are also other financial challenges that women planning<\/a><\/strong> for retirement typically face.<\/p>\n It\u2019s common knowledge that women, on average, earn less than men, which means that they generally have less money to save and invest. Over a working life, this can add up to hundreds of thousands of dollars.<\/p>\n As a woman, you\u2019re also more likely than a man to take time away from your career to raise a family, which means that your cumulative earnings over your working life will be relatively lower. And, less income and fewer years working mean that at retirement<\/a><\/strong> your Social Security benefit will be lower.<\/p>\n Women are typically more conservative investors<\/a><\/strong> than men, which means that the dollars you\u2019ve saved for retirement probably won\u2019t grow as quickly.<\/p>\n Women are more likely to take on the primary caregiving role for elderly parents. This can mean more time away from your career, which means less time to save for retirement and fewer working years counted for your Social Security earnings history.<\/p>\n <\/p>\n Because retirement <\/span>planning<\/a><\/strong> for women is different, and because independent women may face financial challenges that men typically don\u2019t, it\u2019s all the more important to understand what your needs in retirement will be. Financial independence for women in retirement starts with a picture of what your ideal retirement looks like.<\/p>\n Where would you like to live when you\u2019re retired? How would you like to spend a typical day? Would you like to travel, to visit your kids or grandkids, to devote more time to causes that are important to you?<\/p>\n Once you\u2019ve developed a clear vision of how you\u2019d like to enjoy your retirement, you can use it as the foundation for your retirement plan. A good retirement plan will include all of your financial goals, like your income needs in retirement, expenses for health care, and other one-off or \u201cbig ticket\u201d expenses like travel, charitable giving, periodic home repairs or upgrades, and support for loved ones.<\/p>\n With your financial goals defined and prioritized, you can then look at the resources you\u2019re likely to have available in retirement to pay for them.<\/p>\n <\/p>\n Social Security is an insurance program run by the federal government, designed to provide benefits to American retirees, their survivors, and workers who become disabled.<\/p>\n The program is funded through contributions from active workers, usually through payroll withholdings where they\u2019re employed. Anyone who has paid into the Social Security system for at least 10 years is eligible to receive retirementbenefits<\/a><\/strong>.<\/p>\n Social Security will replace a percentage of your pre-retirement income, based on your lifetime earnings. The portion that it replaces is based on your highest 35 years of earnings and will vary depending on how much you earn and when you decide to claim your benefit.<\/p>\n You can receive an <\/span>early retirement benefit<\/a><\/strong> at age 62, while a higher monthly benefit is available at your \u201cfull retirement age<\/a><\/strong>.\u201d If you were born between 1943 and 1954, your full retirement age is 66. If you were born between 1955 and 1959, your full retirement age is between 66 and 67. And if you were born in 1960 or later, your full retirement age is 67.<\/p>\n If you\u2019re willing and able to delay taking your Social Security benefit beyond your full retirement age, you can do so until age 70, and your benefit will be increased<\/a><\/strong>.<\/p>\n But what if your working career was limited, because you took time out of the workforce to raise your family or to care for an elderly parent, and you don\u2019t think you\u2019ll have 35 years of earnings?<\/p>\n If you\u2019re married, you may be eligible for a <\/span>spousal benefit<\/a><\/strong> that is higher than your own benefit. If you\u2019re at least 62 and your spouse is eligible or is already receiving retirement or disability benefits, you\u2019re entitled to a spousal benefit.<\/p>\n A spousal benefit is equal to up to one-half of the worker\u2019s retirement benefit. So, if you qualify for a Social Security benefit on your own record, but a spousal benefit would be larger than your own benefit, the Social Security Administration will pay you your own benefit, plus an additional amount so that the combination equals the higher spousal benefit.<\/p>\n Note that if you begin taking benefits between age 62 and your full retirement age, the benefit amount will be permanently reduced, and also that your spousal benefit is based on your spouse\u2019s benefit at full retirement age (i.e. your spousal benefit won\u2019t go up if your spouse delays taking Social Security beyond full retirement age).<\/p>\n What if you\u2019re an independent woman planning for retirement who\u2019s no longer married? You may be entitled to receive an ex-spousal benefit<\/a><\/strong> if:<\/p>\n And if you\u2019re divorced and your ex-spouse passes away, you could be entitled to receive a surviving ex-spousal benefit<\/a><\/strong>, as long as your marriage lasted 10 years or more. Your survivors benefit is based on the earnings of your deceased ex-spouse. If you\u2019ve reached full retirement age, your survivors benefit will be 100% of your deceased ex-spouse\u2019s benefit. If you decide to claim your survivors benefit before your full retirement age, then your benefit will be a reduced percentage of your deceased ex-spouse\u2019s benefit.<\/p>\n As a surviving ex-spouse, if you remarry after age 60, the remarriage won\u2019t disqualify you from eligibility to receive a survivors benefit.<\/p>\n If you\u2019ve accumulated enough credits for Social Security so that your own benefit is larger than any spousal or ex-spousal benefit you might be eligible to receive, you\u2019ll need to determine whether or not it makes sense to take your benefit early, at full retirement age, or as late as age 70.<\/p>\n For most, the answer to this question depends on two factors: how long you\u2019ll live, and whether you have other resources for retirement income if you delay taking your Social Security benefits.<\/p>\n Your Social Security benefits are increased by 8% for each year you delay taking them after full retirement age. So, your benefit at age 70 will be 24% higher than it would be at age 67. But if you wait until age 70 to start taking benefits, you\u2019ll miss out on 36 months of payments. To recoup that missed money in the form of higher payments that start later, you\u2019ll need to be fairly confident that you\u2019ll live well into your 80s. And you\u2019ll also need an adequate source of income to live on until your delayed, higher Social Security benefits start. That could be a pension, retirement savings, rental income, or proceeds from a reverse mortgage, to name a few examples.<\/p>\n If you\u2019re not confident you\u2019ll live longer than average, or if you don\u2019t have sufficient other resources, it probably makes sense to start taking your Social Security benefits at full retirement age. A financial advisor specializing in retirement planning for women can help you decide the best time to begin taking your benefits.<\/p>\n <\/p>\n Social Security provides a foundation of retirement protection. But the benefits are more modest than many people think \u2013 the average Social Security retirement benefit in 2019 was about $1,470 per month, or about $17,640 per year. And for the average wage earner, Social Security will only replace about 35% of their pre-retirement income. So, women planning for retirement need additional savings to supplement their Social Security benefits.<\/p>\n You are likely aware of the well-known 401(k) and 403(b) plans. These plans don\u2019t provide a guaranteed pension benefit at retirement, but instead permit you to contribute a defined amount of your pay to a retirement account in your name. Your contributions may be matched or supplemented by your employer. The contributions and earnings in your account grow tax-deferred until you\u2019re ready to begin taking distributions, typically at retirement. Crucially, though, the amount you\u2019ll have saved at retirement is not guaranteed \u2013 it depends on the growth of your investments over time \u2013 and so your income at retirement<\/a><\/strong> is also not guaranteed.<\/p>\n From a tax perspective, there are two types of defined contribution plans \u2013 \u201ctraditional\u201d and \u201cRoth\u201d. In a traditional plan, you don\u2019t pay state or federal income tax on the portion of your pay that you contribute to the plan \u2013 it\u2019s a \u201cpre-tax\u201d contribution. When you eventually take distributions from your account, each payment will be taxed as ordinary income. In contrast, in a \u201cRoth\u201d plan, the portion of your pay that you contribute to the plan is done after you\u2019ve paid state and federal income tax. But when you take distributions from your account, each payment will be tax-free.<\/p>\n The amount that you can contribute to your account each year is capped, and typically increased a bit every year or two to reflect inflation. For 2020, the maximum employee contribution amount is $19,500. For workers age 50 or older, an additional $6,500 catch-up contribution (for a total of $26,000) can be made.<\/p>\n There are several good reasons why women planning for retirement should participate in their employer-sponsored retirement plan. Here are just a few:<\/p>\n Your contributions to the plan are made via payroll deductions every pay period. There\u2019s no need to write a check. And with payroll deductions, you\u2019re effectively paying yourself first.<\/p>\n Data shows that the majority of employer-sponsored offer some sort of matching contribution to encourage participation. This is literally \u201cfree money\u201d \u2013 and something you shouldn\u2019t pass up, if at all possible.<\/p>\n As noted above, with a traditional plan, your contributions are tax-deductible, lowering your taxable income, and the growth in your account is tax-deferred.<\/p>\n One of the major attractions of defined contribution plans is the compounding of growth in your account. In a nutshell, all the earnings are kept in your account, so that you earn a return on your contributions plus past earnings \u2013 a snowball effect. In the short term, the gains from compounding look small. But over the long term, the growth is exponential.<\/p>\n Because defined contribution plans are \u201cparticipant-directed\u201d, you\u2019ll have the opportunity to decide on your own investment strategy from a list of approved investments picked by your employer. Your investment mix should be based on your age, investment horizon, and tolerance for investment risk.<\/p>\n But what if you\u2019re self-employed, or your employer doesn\u2019t offer a defined contribution plan?<\/p>\n If you\u2019re self-employed, there\u2019s good news \u2013 you can simply set up a self-employed, or \u201csolo\u201d 401(k) plan for your business. There are a wide variety of no-cost or low-cost options available, and most large financial institutions (banks, brokerage firms and mutual fund companies) offer these plans.<\/p>\n If you work for a company that doesn\u2019t offer a plan, and your employer isn\u2019t interested in setting one up, then your choices are more limited.<\/p>\n The best option is to save in a traditional or Roth Individual Retirement Account (\u201cIRA\u201d). The tax treatment of IRAs is basically the same as that for defined contribution plans \u2013 contributions to a traditional IRA are tax-deductible, but distributions are taxed as ordinary income, while contributions to a Roth IRA are made with after-tax dollars, but distributions are tax-free.<\/p>\n The downside with IRAs is that the contribution limits are much lower than for defined contribution plans. For 2020, the annual IRA contribution limit is $6,000, with an additional $1,000 catch-up contribution possible for those age 50 and older.<\/p>\n It\u2019s important to note that it\u2019s possible to contribute to both a defined contribution plan and to an IRA in the same year. Participating in one doesn\u2019t preclude you from participating in the other.<\/p>\n <\/p>\n You\u2019ve built a plan for your ideal retirement, and you\u2019re participating in your retirement plan<\/a><\/strong> at work to accumulate additional resources to supplement your estimated Social Security benefit. Your plan looks solid, and you\u2019re confident that you\u2019re on the right path.<\/p>\n Have you also considered what might jeopardize your plan?<\/p>\n There are a number of things that can throw a solid financial plan off-course<\/strong><\/a>, much like storms, headwinds or lulls can change your course when sailing \u2013 things like higher taxes, lower investment returns in the future, or higher inflation. But the two biggest potential risks for women planning for retirement are longevity and needing care later in life.<\/p>\n Women tend to live longer than men, on average. Depending on your family health history, it may be appropriate for your plan to assume you\u2019ll live well into your 90s, or perhaps even longer. There are now more American centenarians than ever before, and the number is growing every day as our population ages.<\/p>\n With a longer life expectancy comes an increased risk of outliving your resources. One way to address this risk is to explore buying an annuity from an insurance company. In exchange for a lump sum payment, the insurance company will make regular payments to you for a period you choose \u2013 for example, at least 10 years, at least 20 years, or for life. Annuities can be attractive for those who are confident that they\u2019ll live longer than the insurance company thinks they will.<\/p>\n As America\u2019s population ages, more of us than ever are finding ourselves caring<\/a><\/strong> for ageing parents or relatives. Women planning for retirement should consider whether they may require some level of care later in life, as well. To address this risk, you can buy long-term care insurance, which provides benefits if you\u2019re unable to perform or need assistance with certain so-called \u201cactivities of daily living.\u201d<\/p>\n Whether long-term care makes sense for you is a function of several variables: your family health history, your resources, and your need to shift some or all of the risk to an insurance company.<\/p>\n Long-term care insurance can be expensive, and there is a fairly simple reason for that: people who own these policies tend to not let them lapse, and a high percentage eventually make claims on their policy.<\/p>\n If you\u2019re not confident that you\u2019ll need care later in life, or that if you do, it will be for an extended period, you can consider putting in place a \u201chome equity conversion mortgage\u201d \u2013 also known as a reverse mortgage \u2013 on your home, which will give you the flexibility to access some of the equity in your home to cover long-term care expenses, should you need to.<\/p>\n <\/p>\n If the thought of building your own financial plan, and managing your own investment and retirement accounts in a prudent, professional manner, seems like a daunting task, consider hiring a financial advisor<\/a><\/strong> to help you.<\/p>\n While it may seem tempting to start your search for a competent, ethical and experienced advisor with recommendations from family members, friends or neighbors, there\u2019s a more reliable and thorough way to approach it.<\/p>\n Start by looking for advisors who hold the CFP\u00ae credential. The CFP\u00ae \u2013 or CERTIFIED FINANCIAL PLANNER(TM) \u2013 certification is the most widely recognized financial planning designation. In order to earn this certification a financial planner must (a) complete a college-level, board-approved program of study in personal financial planning, (b) pass a comprehensive two-day exam, (c) have three years of experience or two years as an apprentice, and (d) commit to following the CFP Board’s Standards of Personal Conduct.<\/p>\n For these reasons, the CFP\u00ae designation is generally considered the gold standard credential for financial advisors.<\/p>\n There are online resources that you can use to begin your search for a CFP\u00ae professional, including the websites of the CFP Board<\/a><\/strong> itself, the Financial Planning Association<\/a><\/strong>, and the National Association of Personal Financial Advisors<\/a><\/strong>.<\/p>\n As a woman planning for retirement, there are some other important criteria that you should consider using in your screening process:<\/p>\n Look for an advisor who\u2019s independent, as independent advisors typically face fewer conflicts of interest than those employed by large financial services companies.<\/p>\n Look for an advisor who\u2019s compensated only by fees from their clients, rather than from commissions for product sales. A fee-only advisor won\u2019t be incentivized to sell you high-commission, potentially unsuitable products you probably don\u2019t want or need.<\/p>\n Life experience is important, and no less so when dealing with the volatile cycles of the investing markets. An experienced advisor will have gone through a few of these tumultuous periods, and is more likely to stay objective and even-keeled when advising you on important decisions. Ideally, this experience will also include working with clients like you.<\/p>\n Finally, consider some subjective criteria, too, because this will hopefully be an important, long-term relationship for you. For example, do you have a preference for a male or female advisor? Would you prefer working with an advisor who\u2019s younger than you, older than you, or generally your age? Is it important that your advisor is geographically nearby? And perhaps most importantly, do you feel like you have a good personal rapport with the advisor?<\/p>\n Selecting an advisor<\/a><\/strong> who you like, trust, and will enjoy working with can make financial planning a pleasant, empowering experience.<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”3.22.3″ background_color=”#0060a5″ custom_padding=”14px|0px|0|0px|false|false” global_module=”4205″][et_pb_row column_structure=”1_3,1_3,1_3″ _builder_version=”3.25″ custom_padding=”27px|0px|27px|0px|false|false”][et_pb_column type=”1_3″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text admin_label=”PDX Office Address” _builder_version=”3.27.4″ text_font=”Montserrat||||||||” text_text_color=”#ffffff” z_index_tablet=”500″ text_text_shadow_horizontal_length_tablet=”0px” text_text_shadow_vertical_length_tablet=”0px” text_text_shadow_blur_strength_tablet=”1px” link_text_shadow_horizontal_length_tablet=”0px” link_text_shadow_vertical_length_tablet=”0px” link_text_shadow_blur_strength_tablet=”1px” ul_text_shadow_horizontal_length_tablet=”0px” ul_text_shadow_vertical_length_tablet=”0px” ul_text_shadow_blur_strength_tablet=”1px” ol_text_shadow_horizontal_length_tablet=”0px” ol_text_shadow_vertical_length_tablet=”0px” ol_text_shadow_blur_strength_tablet=”1px” quote_text_shadow_horizontal_length_tablet=”0px” quote_text_shadow_vertical_length_tablet=”0px” quote_text_shadow_blur_strength_tablet=”1px” header_text_shadow_horizontal_length_tablet=”0px” header_text_shadow_vertical_length_tablet=”0px” header_text_shadow_blur_strength_tablet=”1px” header_2_text_shadow_horizontal_length_tablet=”0px” header_2_text_shadow_vertical_length_tablet=”0px” header_2_text_shadow_blur_strength_tablet=”1px” header_3_text_shadow_horizontal_length_tablet=”0px” header_3_text_shadow_vertical_length_tablet=”0px” header_3_text_shadow_blur_strength_tablet=”1px” header_4_text_shadow_horizontal_length_tablet=”0px” header_4_text_shadow_vertical_length_tablet=”0px” header_4_text_shadow_blur_strength_tablet=”1px” header_5_text_shadow_horizontal_length_tablet=”0px” header_5_text_shadow_vertical_length_tablet=”0px” header_5_text_shadow_blur_strength_tablet=”1px” header_6_text_shadow_horizontal_length_tablet=”0px” header_6_text_shadow_vertical_length_tablet=”0px” header_6_text_shadow_blur_strength_tablet=”1px” box_shadow_horizontal_tablet=”0px” box_shadow_vertical_tablet=”0px” box_shadow_blur_tablet=”40px” box_shadow_spread_tablet=”0px”]<\/p>\n OUR LOCATIONS<\/strong><\/p>\n Our Portland office is conveniently located off the SW Denney Road exit from Highway 217.<\/p>\n 6600 SW 105th Avenue, Suite 155 Our Bay Area office is located in downtown Santa Cruz.<\/p>\n 133 Mission Street [\/et_pb_text][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text admin_label=”Schedule Consultation” _builder_version=”3.27.4″ text_font=”Montserrat||||||||” text_text_color=”#ffffff”]<\/p>\n SCHEDULE A FREE CONSULTATION<\/strong><\/p>\n If you’d like to learn more about how we can help you build a solid plan for your future, let us know by filling out our contact form. Or give us a call at (888) 998-4796.<\/p>\n [\/et_pb_text][\/et_pb_column][et_pb_column type=”1_3″ _builder_version=”3.25″ custom_padding=”|||” custom_padding__hover=”|||”][et_pb_text _builder_version=”3.27.4″ text_font=”Montserrat||||||||” text_text_color=”#ffffff”]<\/p>\n CONNECT WITH US<\/strong><\/p>\n Want to keep up with the latest news from Springwater? Follow us across our social networks.<\/p>\n [\/et_pb_text][et_pb_social_media_follow _builder_version=”4.2.2″][et_pb_social_media_follow_network social_network=”twitter” url=”https:\/\/twitter.com\/SpringwaterWM” _builder_version=”4.2.2″ background_color=”#00aced” follow_button=”off” url_new_window=”on”]Twitter[\/et_pb_social_media_follow_network][et_pb_social_media_follow_network social_network=”facebook” url=”https:\/\/www.facebook.com\/SpringwaterWealth\/” _builder_version=”4.2.2″ background_color=”#3b5998″ follow_button=”off” url_new_window=”on”]Facebook[\/et_pb_social_media_follow_network][et_pb_social_media_follow_network social_network=”linkedin” url=”https:\/\/www.linkedin.com\/company\/springwater-wealth-management\/” _builder_version=”4.2.2″ background_color=”#007bb6″ follow_button=”off” url_new_window=”on”]LinkedIn[\/et_pb_social_media_follow_network][\/et_pb_social_media_follow][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" The Independent Woman’s Guide to RetirementYou probably know that women, on average, tend to live longer than men. With a longer life expectancy, you\u2019ll likely have more time to enjoy retirement, but it also means that you\u2019ll need to be more prepared for retirement. Table of Contents Chapter 1: Why Retirement Planning is Different for […]<\/p>\n","protected":false},"author":2,"featured_media":0,"parent":5362,"menu_order":3,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"The decision to divorce is one of the most significant decisions you will make in your lifetime. It has profound implications. It can affect your entire family (kids, parents, siblings, etc.) your friends, and where you live. It may affect your physical health, your mental health, and your career. It can also affect you financially.\r\n\r\nYou\u2019ll want to seek advice and support from a variety of experts who can support you during this challenging transition. You should work with a family law attorney to understand and address the legal aspects of divorce. You might want to consult with a family counselor\/therapist to work through the personal and family issues associated with divorce. You may wish to seek the advice of a financial planner\/advisor (Certified Financial Planner\u2122, Chartered Financial Consultant\u00ae, or Certified Divorce Financial Analyst\u00ae) who can help you navigate the many financial ramifications of divorce.\r\n\r\nWe are not attorneys and this guide is not designed to provide legal advice. We are also not licensed therapists, and, therefore, we are not trained to help you with the personal issues you will face. We are financial planners, and we hold the CFP\u00ae, ChFC\u00ae, and CDFA\u00ae credentials. We have decades of experience providing financial guidance and advice to women who are contemplating, going through, newly emerging from, and\/or living long after divorce. This guide is designed to help you prepare for, negotiate, avoid the mistakes of, and live beyond divorce.\r\n\r\n Table of Contents<\/strong>\r\nChapter 1: How Women Can Prepare Financially for Divorce<\/a>\r\nChapter 2: How Women Can Negotiate Financially in Divorce<\/a>\r\nChapter 3: How Women Can Thrive Financially After Divorce<\/a>\r\nChapter 4: Going through Divorce? -\u00a0 Surround yourself with Financial Experts<\/a>\r\n<\/p>\r\nLower Earnings<\/h3>\n
Shorter Career<\/h3>\n
Conservative Investing<\/h3>\n
Caregiving Obligations<\/h3>\n
<\/a>2: Understanding Your Needs in Retirement<\/h2>\n
<\/a>3: Understanding Social Security<\/h2>\n
What is Social Security?<\/h3>\n
When You Can Begin Receiving Social Security Benefits<\/h3>\n
Spousal and Ex-Spousal Benefits<\/h3>\n
\n
When to Claim Your Benefit<\/h3>\n
<\/a>4: Utilizing Your Employer\u2019s Retirement Savings Plan and Individual Retirement Accounts<\/h2>\n
It\u2019s easy<\/h3>\n
Possibly, Free Money<\/h3>\n
Tax Breaks<\/h3>\n
Compound Growth<\/h3>\n
<\/a>5: Plan Ahead<\/h2>\n
<\/a>6: Consider Working with a CFP\u00ae Professional<\/h2>\n
Independent<\/h3>\n
Fee-Only<\/h3>\n
Experienced<\/h3>\n
Beaverton, OR 97008<\/p>\n
Santa Cruz, CA 95060<\/p>\n
\r\n
\r\n
\r\n
\r\n
\r\n1: How Women Can Prepare Financially for Divorce<\/h2><\/a>\r\nMost of the biggest decisions we make in life have financial implications.\u00a0 Deciding where to go to college.\u00a0 Deciding on a career.\u00a0 Deciding where to live.\u00a0 Deciding whether or not to have children.\u00a0 All of these decisions impact you financially.\u00a0 However, none of them affects you as much as a\u00a0divorce<\/a><\/strong>.\r\n\r\nBecause women often delegate financial responsibility to their spouses, they are often not as familiar with their household finances.\u00a0 This means that they may not have thought about the financial impact of divorce on women.\u00a0 So, let\u2019s consider how you can\u00a0prepare financially<\/a><\/strong>\u00a0for divorce.\r\n\r\nA good place to start is with spending.\u00a0 What are you spending to live currently?\u00a0 What will change if you divorce?\u00a0 Presumably, either you or your spouse will move to a different living environment.\u00a0 If you remain in your current home, will you be able to pay the associated costs (mortgage\/rent, taxes, insurance, utilities, maintenance)?\u00a0 If you decide to move, what are those costs likely to be?\r\n\r\nWhat about health insurance?\u00a0 Are you on a plan that will continue after divorce?\u00a0 If not, how will you obtain coverage and what will it cost?\u00a0 Do you need life insurance?\u00a0 If so, how much and what kind and what will it cost?\r\n\r\nDo you expect to receive alimony from your ex-spouse?\u00a0 How much and for how long?\u00a0 If you have children, what about child support?\u00a0 How much child support and for how long?\u00a0 What about paying for your children\u2019s education (e.g. private school, college, grad school)?\r\n\r\nWhat financial assets (e.g. home, property, pensions, retirement accounts, investments, etc.) do you and your spouse own?\u00a0 What are the tax characteristics of these assets?\u00a0 How are they likely to be divided in a divorce?\r\n\r\nIf you have been out of the workforce, do you plan to return to work?\u00a0 Is returning to work an imperative?\u00a0 Do you have current skills, credentials, knowledge, and experience?\u00a0 If not, will you need to go back to school?\u00a0 How much would additional schooling or training cost?\u00a0 Once you are back at work, how much do you expect to earn?\r\n\r\nAs you might imagine, you will probably need advice as you think through these questions and prepare financially for divorce.\u00a0 You should talk to a family law attorney about all of the legal aspects of divorce.\u00a0 You should consult with a financial advisor (Certified Financial Planner\u2122, Chartered Financial Consultant\u00ae, or Certified Divorce Financial Analyst\u00ae) about the financial aspects.\r\n\r\nDivorce can be a very difficult experience.\u00a0 You can minimize the financial impact by preparing and planning ahead.\r\n\r\n
\r\n2: How Women Can Negotiate Financially in Divorce<\/h2><\/a>\r\nIf you have decided to divorce your spouse, there are several ways in which you can approach the process.\u00a0 If you and your spouse are on good terms and your situation can be simple (e.g., no kids, limited assets, no legal complexity, and good collaborative spirit with your partner), you might be able to \u201cdo it yourself.\u201d\u00a0 You would follow the laws in your county and state and complete the documents necessary to dissolve your marriage.\r\n\r\nIf your situation is more complex (kids, significant assets, legal complexity) and you and your spouse are on good terms as you discuss ending your marriage, then you might consider a collaborative approach.\u00a0 This process involves working with a team to negotiate an agreement to end your marriage.\u00a0 The team typically includes attorneys (one for you and one for your spouse), a divorce coach, a financial specialist (Certified Divorce Financial Analyst\u00ae), and, if you have children, a child specialist.\u00a0 The group will work together to achieve a dissolution agreement that will avoid litigation in court.\r\n\r\nIf you and your spouse are in dialogue, but struggling to come to terms on your divorce, you should consider mediation.\u00a0 This is true regardless of the complexity of your situation.\u00a0 In mediation, you and your spouse hire an attorney (or you each hire an attorney) to help you sort through and resolve the areas of conflict as you pursue the end of your marriage.\u00a0 The goal of mediation is to reach an agreement about the dissolution without going to court.\r\n\r\nIf you and your spouse are in unhealthy conflict and none of the other methods will work, then you will be forced to pursue a litigated dissolution.\u00a0 This is the least desirable approach, because it is contentious, unpleasant, public, and expensive.\r\n\r\nWhat are the financial\u00a0issues<\/strong><\/a>\u00a0that are negotiated in the dissolution of a marriage?\u00a0 Alimony (i.e. payments by one spouse to the other for the support and maintenance of the other spouse) and child support (i.e. payments by one spouse to the other to care for children and keep them in the same general standard of living they experienced before the divorce) are the most common.\r\n\r\nIf you and your spouse have accumulated assets, you will need to decide how to divide them between the two of you.\u00a0 Your home is probably the most obvious shared asset.\u00a0 Who will live in it?\u00a0 Will it be sold?\u00a0 Is there a mortgage?\u00a0 How will you divide the value of it?\r\n\r\nWhat about retirement assets?\u00a0 Do either of you have pensions, employer-sponsored retirement accounts (e.g. 401(k), 403(b), deferred compensation), IRAs, and Roth IRAs?\u00a0 What about employer stock and stock options?\u00a0 Remember that retirement assets are typically tax-deferred (i.e. the income tax due is deferred until distributed in retirement).\u00a0 That means that they are worth less than the stated value, because taxes will eventually be deducted from them.\r\n\r\nHow about other assets such as investment accounts, insurance contracts (cash value life insurance, annuities) loans to others, coin collections, intellectual property (patents, copyrights, trademarks), businesses, vehicles (cars, trucks, RVs, boats, etc.), timeshares, rental property, timeshares, raw land, collections, antiques, artwork, and household goods and furnishings?\r\n\r\nAre there debts to others (e.g. credit cards, home equity loans, personal loans, unpaid taxes)?\r\n\r\nHow do you value your assets?\u00a0 In some cases, there is a ready market that provides current values (i.e. stock in a publicly traded company).\u00a0 However, in many cases, you will need a professional appraisal of the asset.\u00a0\u00a0 You may need multiple appraisals, if you and your spouse cannot agree on an initial appraisal.\r\n\r\nAnything of any significant value will become part of the settlement process.\u00a0 Yes, there may be prior agreements between you and your spouse that segregate certain assets, but you will still need to come to an agreement about who gets what. Also, state law (e.g. community property law) may determine how assets are divided.\r\n\r\nYour objective in the financial part of the settlement process should be to identify all assets (and liabilities), obtain proper fair market value for them and determine how you would like them divided between you and your spouse.\u00a0 You may need the help of an attorney, tax professional, a financial planner (Certified Financial Planner\u2122, Chartered Financial Consultant\u00ae, or\u00a0Certified Divorce Financial Analyst\u00ae<\/strong><\/a>), and appraiser(s).\r\n\r\n
\r\n3: How Women Can Thrive Financially After Divorce<\/h2><\/a>\r\nIf you are just emerging from divorce, you are probably trying to reassemble your life.\u00a0 You may have just travelled through one of the darkest chapters in your life.\u00a0 But you made it to the other side.\u00a0 Now let\u2019s look at how you can thrive financially after divorce.\r\n\r\nThe place to start to rebuild your financial life is, perhaps curiously, to take care of yourself.\u00a0 Focus on your health.\u00a0 Make sure your diet is nutritious.\u00a0 Exercise several times each week.\u00a0 Get plenty of sleep (7- hours).\u00a0 Keep alcohol consumption to a minimum.\u00a0 Don\u2019t smoke and avoid recreational drugs and other dangerous behavior.\u00a0 Surround yourself with positive, uplifting people.\u00a0 Practice your religion or meditate or do whatever you do to nurture your inner self.\r\n\r\nOnce you are feeling better about yourself, you can start thinking about your financial life.\u00a0 Start with an assessment.\u00a0 What are your assets and liabilities?\u00a0 These make up your balance sheet and the difference between the two of them is your net worth.\u00a0 What are your sources of income?\u00a0 Perhaps you are working or soon will be working.\u00a0 How much will you earn?\u00a0 Are you receiving alimony?\u00a0 How much and for how long?\u00a0 What about child support?\u00a0 Will you have other income from, say, rental property?\r\n\r\nNow that you know how much income you will have coming in, let\u2019s consider your expenses.\u00a0 Do you know what you were spending before you got divorced?\u00a0 How will that change?\u00a0 Did you move?\u00a0\u00a0 What are your fixed costs for housing (mortgage\/rent, tax), utilities, insurances (personal, property, and casualty), cell phone, cable TV and internet, gym membership, groceries, transportation, entertainment, etc.?\u00a0 What about your variable expenses for vacations, home repair and maintenance (e.g. appliances), vehicle replacement?\u00a0 The more precise you are in identifying and projecting your expenses, the more confident you will be about your financial future.\r\n\r\nBefore we go any further, let\u2019s step back and acknowledge that you should be saving for any large future expenditures that are not in your core living expenses.\u00a0 That means saving for vacations, replacement vehicles, your children\u2019s education, and, above all, retirement.\u00a0 The best way to organize your finances is to save first and spend second.\u00a0 Most people spend first and save second, if there is anything left to save and too often there isn\u2019t.\r\n\r\nWhat do you do if your income is not big enough to save the way you need to and spend the way you want to?\u00a0 Well, you will have to make some tough decisions.\u00a0 What\u2019s most important to you?\u00a0 Do you need to live in the house you shared with your ex-spouse?\u00a0 Do you need to take as many vacations?\u00a0 Can you trim your cable TV package?\u00a0 Could you change jobs and earn more?\u00a0 What about taking on a second part-time job?\u00a0\u00a0 Try to find ways to reduce your expenses and\/or increase your income, so that you can save what you need to save and spend what you want to spend, but saving is your priority so don\u2019t compromise it.\r\n\r\nIn the wake of a divorce, there are some other tasks you need to take in order to be financially secure.\u00a0 You should change the beneficiary designations on your retirement accounts, your insurance policies and your \u201ctransfer-on-death\u201d accounts.\u00a0 You should check in with the\u00a0Social Security<\/a><\/strong>\u00a0Administration and clarify your benefits.\u00a0 If you were married for ten or more years, you will qualify for benefits based on your ex-spouse\u2019s record and those benefits may be larger than your own. (You receive the larger of the two.)\u00a0 If there are mistakes in your earnings record, you can correct them.\u00a0 You should establish an emergency fund that contains enough cash to pay for a large, unexpected expense or pay your basic, fixed living expenses for 3-6 months if you become unemployed for some reason.\u00a0 You should update your\u00a0estate plan<\/strong><\/a>\u00a0(will, durable power of attorney, and health directive).\r\n\r\nAs you might imagine, to work through and accomplish these financial tasks, you may need assistance from a financial advisor (Certified Financial Planner\u2122, Chartered Financial Consultant\u00ae, or Certified Divorce Financial Analyst\u00ae), insurance agents, tax professional, and estate planning attorney.\r\n\r\nThe key to thriving financially after divorce is developing a sound plan and following it.\r\n\r\n
\r\n4: Going through Divorce? -\u00a0 Surround yourself with Financial Experts<\/h2><\/a>\r\nThere are a lot of issues to consider as you go through a divorce.\u00a0 They fall into categories: legal,\u00a0financial<\/a><\/strong>, tax, and investment.\u00a0 Let\u2019s consider the issues and who can help you navigate them.\r\n\r\nUnless you plan to execute your own divorce (i.e. do-it-yourself) in your legal jurisdiction (state and county), you will need to hire an attorney who can walk you through the process of dissolving your marriage.\u00a0 While most attorneys are capable of guiding you, we suggest you work with a family law attorney who focuses on divorce.\u00a0 You can find family law attorneys by searching on your state bar\u2019s website, asking other professionals for a referral, or doing a simple internet search.\u00a0 You should interview 2-3 and select the person who is most qualified and with whom you have the best personal rapport.\r\n\r\nIf you are likely to receive alimony from your ex-spouse, your divorce attorney will help you negotiate an amount and a payment period that is fair.\u00a0 If you have children and expect to receive child support, your attorney will also negotiate those payments.\r\n\r\nDivorce results in a tangle of financial issues.\u00a0 What are the marital assets, what are they worth and how will they be divided?\u00a0 How much income will you have after your divorce?\u00a0 Will that be enough to support you?\u00a0 What will you do for insurance?\u00a0 How will you save for retirement?\u00a0 What will be your Social Security benefits?\u00a0 What happens if your ex dies and your alimony and child support end?\r\n\r\nThere are various financial advisors who can help you with the different financial issues you will encounter in your divorce.\u00a0 A financial advisor can help you with many aspects of\u00a0personal finance<\/a><\/strong>\u00a0<\/strong>(budgeting, insurance, taxes, estate planning, investments, education funding, retirement planning).\u00a0 Look for a fee only planner who does not sell financial products and earn commissions.\u00a0 The Certified Financial Planner\u2122 and Chartered Financial Consultant\u00ae credentials are the most respected credentials held by financial planners.\u00a0 If you feel you need particular expertise in the area of divorce financial planning, look for a\u00a0Certified Divorce Financial Analyst\u00ae<\/a><\/strong>.\u00a0 You can search for a CFP\u00ae at the\u00a0CFP Board website<\/strong><\/a>\u00a0and a CDFA\u00ae on the\u00a0Institute for Divorce Financial Analysts website<\/a><\/strong>. The American College awards the ChFC\u00ae designation, but there is no way to directly search for one on its website.\r\n\r\nIf you have difficult-to-value assets, you should hire an appraiser.\u00a0 The American Society of Appraisers confers\u00a0four appraisal credentials<\/a><\/strong>\u00a0<\/strong>related to the subject in need of appraising.\u00a0 There is a \u201cFind an appraiser\u201d tool on its\u00a0website<\/a><\/strong>.\u00a0\u00a0\u00a0 If you are trying to value a business, consider hiring an accountant with the Accredited Business Valuation (ABV) credential.\u00a0 There is a credential directory tool on the\u00a0AICPA website<\/a>.<\/strong>\r\n\r\nIf you need tax-specific advice, work with a Certified Public Accountant (CPA) or an Enrolled Agent (EA).\u00a0 The state society of Certified Public Accountants will often have a tool on its website that allows a consumer to find a CPA.\u00a0 You can search for an enrolled agent on the National Association of Enrolled Agents\u00a0website<\/a><\/strong>.\r\n\r\nWhat about insurance?\u00a0 If you need help with personal insurance including life insurance, disability insurance, annuities and long term care insurance, consider working with a Chartered Life Underwriter (CLU\u00ae).\u00a0 The American College bestows the CLU credential, but there is no search tool on its website to find a CLU.\u00a0 If you need help with health insurance, consider working with a Chartered Healthcare Consultant\u00ae (ChHC\u00ae), Registered Health Underwriter (RHU\u00ae) or Registered Employee Benefits Consultant (REBC\u00ae).\u00a0 All of these credentials are administered by the National Association of Health Underwriters, and there is a \u201cfind an agent\u201d tool on its\u00a0website<\/strong><\/a>.\r\n\r\nIf you need assistance with your investments, there are two credentials for which you should look.\u00a0 The Certified Financial Planner\u2122 (CFP\u00ae) and the Chartered Financial Analyst (CFA) designations.\u00a0 The latter can be found on the CFA Institute website on their\u00a0member directory<\/strong><\/a>.\r\n\r\nYou will need to update your estate plan. While most attorneys are capable of doing this, consider working with an estate planning attorney.\u00a0 These attorneys work more narrowly on estate planning matters.\u00a0 As with family law attorneys, you can find an estate planning attorney on your state bar\u2019s website.\r\n\r\nFor all of these professionals, you can, of course, ask for referrals from other friends, family members, and other professionals you know or conduct a search on the internet.\u00a0 It is always wise to interview 2-3 experts before selecting one to serve you.\r\n\r\nDivorce is a complex process with many and varied financial consequences.\u00a0 Surround yourself with experts to avoid pitfalls and achieve the very best outcomes.","_et_gb_content_width":"","_mi_skip_tracking":false,"footnotes":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/pages\/5324"}],"collection":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/comments?post=5324"}],"version-history":[{"count":0,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/pages\/5324\/revisions"}],"up":[{"embeddable":true,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/pages\/5362"}],"wp:attachment":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/media?parent=5324"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}