The months leading up to a divorce can be a challenging time, filled with items that demand attention and a feeling of charting new waters. For many in Georgia, making financial decisions can feel overwhelming in the midst of so many other changes, some of them deeply personal. However, money matters should rank at the top of any divorce to-do list.
In many cases, a spouse is aware that they will receive a sizable sum at the end of their marriage. Determining how best to utilize this money is important, as the decisions made now can have lifelong consequences. Some spouses simply assume that the best use of money received from divorce is to pay down or eliminate their mortgage.
While eliminating or reducing one’s mortgage payment is often a solid financial move, care should be given that this is the best way to invest. One rule of thumb is that if it is possible to earn more from investments than what is being paid out on a mortgage, choosing to invest is the right course of action. This is especially true once the tax ramifications are factored into each path.
Each financial scenario is unique, and there is no one-size-fits all solution. For some individuals, the security of knowing that their money is safely and conservatively invested is priceless; others can shoulder a greater level of risk in their investments, and could enjoy greater returns as a result. For Georgia residents who are considering their options following divorce, there is plenty of solid financial advice available to guide the way.
Source: Fox Business, “Best Use of Divorce Cash Before Retirement,” Dr. Don Taylor, April 8, 2013