Post-Divorce Financial Planning For Alimony Recipients
If you spent some or all of your marriage out of work or working part time so you could devote yourself to your household and children, you could be entitled to receive alimony as part of your divorce settlement.
Even with alimony income, you will need to make a few financial considerations and lifestyle adjustments to accommodate your post-divorce budget and expenses. Often, advice on financially preparing for post-divorce life is aimed at women, but it is just as applicable to men who receive alimony.
Determine your Health Insurance Coverage
If you were covered by your spouse’s health insurance plan, now is the time to figure out how you will receive health insurance in the future. Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), you can continue your coverage for a limited period of time after your divorce. This can be a stop-gap, but you need to find a long-term insurance solution, such as health insurance through your own employer’s provider or through your government options.
Make Adjustments to your Retirement and Estate Plans
Your estate plans probably included your former spouse and financial projections based on your joint income. Once your divorce is finalized, meet with an estate planning lawyer to do the following:
- Create a new will
- Create new long-term care and healthcare surrogate plans; and
- Determine a new retirement savings plan based on your individual income. You might need to start contributing more toward retirement each month in order to retire comfortably.
Create a Conservative Budget and Do your Best to Stick To It
Although you might want to plan a lavish vacation and treat yourself to new clothes, a new car, or other fun and luxury items that can help you alleviate the stress of going through a divorce, now is not the time to splurge. You are adjusting to a new, single lifestyle where you are the only one paying your rent, you are the only one buying your groceries, you are the only one paying for gas and vehicle maintenance and car insurance, and you are the only one saving up for emergencies. Alimony is not a windfall, it is a safety net.
The best budget for a newly divorced alimony recipient is a conservative one. Keep yourself on a tight budget in the year following your divorce and find free and low-cost ways to treat yourself, like getting a discount massage at a local massage therapy school. After you live with your budget long enough to build up an emergency savings fund and know what your regular expenses are, you can adjust it to give yourself a little bit more “fun money.”
Work with an Experienced Tampa Divorce Lawyer
Getting divorced is difficult, and facing the financial realities of life as a newly single person can be scary. Get the support and legal guidance you need by working with an experienced Tampa divorce lawyer. Contact our team at Bubley & Bubley, P.A. today to set up your initial legal consultation with us.