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Divorce can have long-term impact on one's finances

The fact that the dissolution of a marriage can be emotionally and financially challenging in Florida and elsewhere is no secret. However, recent research quantified how the divorce process impacts a person's long-term finances. This, of course, has implications for his or her retirement readiness especially.  

For starters, beginning next year, anyone receiving alimony might end up being in an extremely low tax bracket, as alimony will not be reportable as income any longer. As a result, these individuals might qualify for a capital gains tax rate of 0 percent. In this situation, it may behoove them to receive investment assets over the family home as part of the divorce settlement. In addition, they might benefit from converting their traditional retirement funds to new Roth Individual Retirement Accounts, as this will create future income that is tax free for them.

When it comes to retirement, another important consideration for those going through divorce is that divorced individuals who were married a minimum of a decade before signing divorce papers can claim Social Security benefits on each other's earnings records. This is currently possible only for those born on or prior to Jan. 1 of 1954. They can do this even as their own Social Security benefits continue to grow until they reach the age of 70.

Divorce can certainly be unsettling. After all, the financial decisions made during a divorce proceeding can have lifelong consequences, both good and bad. However, an attorney in Florida can provide a divorcing spouse with the guidance he or she needs to make the most personally favorable decisions when it comes to matters such as asset distribution in the Sunshine State.

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