Disclosures: A.M. Financial provides supporting financial information, evaluation and analysis to be utilized by the client and the client's selected attorney if directed, during the process of their divorce.  Services provided in regards to this agreement are solely fee-only and do not involve investment or security advice or insurance transactions.  All information is financial in nature and should not be construed or relied upon as legal or tax advice.  A.M. Financial IS NOT AN ATTORNEY AND DOES NOT PROVIDE LEGAL OR TAX ADVICE.  Individuals are encouraged to seek competent legal and tax advice from professionals who specialize in divorce and tax laws in their respective state.

Investment advisory services offered through WealthSource Partners, LLC ("WSP"), a registered investment adviser.  Amy Mahlen (CRD #4692263) is an Investment Adviser Representative of WSP.  Registration with the U.S. Securities and Exchange Commission does not imply any certain level of skill or training.The statements and opinions expressed by A.M. Financial are those of Amy Mahlen and do not represent the views and/or opinions of WealthSource Partners, LLC ("WealthSource") or any other associated or affiliated person of WealthSource. Furthermore, the statements and opinions expressed are for informational and educational purposes only and should not be construed as legal, tax, accounting or investment advice. All statements and opinions are current only as of the time made and are subject to change without notice.  A.M. Financial and WSP are independent and unaffiliated entities.

This website is a publication of A.M. Financial. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. Content should not be viewed as personalized investment advice or as an offer to buy or sell, or a solicitation of any offer to buy or sell the securities mentioned herein. A professional adviser should be consulted before implementing any of the strategies presented.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

Please reload

Recent Posts

Creating New Holiday Traditions of Giving with Kids and Loved Ones

November 15, 2019

1/2
Please reload

Featured Posts

Property Division Values, Part 1: Retirement Accounts

November 21, 2017

When dividing assets in divorce most people, individuals, mediators and attorneys alike, tend to focus on the property division spreadsheet.  Current values of assets are listed along with outstanding debt balances that are deemed to be marital.  Typically, above all else, the focus and end goal is to split property 50-50.  With so much emphasis on this spreadsheet that dictates the remainder of your financial future, is there anything missing that could dramatically skew the end results?

 

The old cliché of ‘nothing is certain in life except death and taxes’ rings loud and true in divorce, don’t ignore them.  As it applies to the property division worksheet, are taxes being considered?  How can evaluating taxes dramatically change the actual results down the road?  In this series, retirement accounts, non-retirement investments, home equity and rental property will be discussed.

 

Part 1 - Retirement Accounts

The reason most people sock money away in a retirement account is because it offers tax benefits.  Most of the time, the statement value is not the amount the individual receives because the value is before-tax.  If retirement assets are being used to offset home equity division or if there are current cash needs from retirement accounts that will trigger taxes, the after-tax values should be considered.  Consider chopping 15%-39% plus an additional 10% early withdrawal penalty away from the current value listed, and now it may only be worth a fraction of what appears on the spreadsheet.

 

 

Be sure to pay attention to Roth IRAs and Roth 401ks.  These accounts are a ‘horse of a different color’ in the retirement category because contributions are made on an after-tax basis.  If Roth assets are withdrawn after the age of 59 ½, the earnings are completely tax-free!  During retirement the value of a Roth does not go on Uncle Sam’s chopping block versus other retirement assets that are 100% taxable.  The earning potential of a Roth is also considerably more powerful because of this difference as well.  For example, if husband kept an $100,000 IRA and wife retained her $100,000 Roth IRA today, 10 years down the road during their retirement with no additional contributions, the accounts would each be worth $200,000 with a 7.2% annual return.  However, if the husband were to distribute his $200,000 he would have $140,000 (assuming he was in the 25% tax bracket plus state taxes) whereas the wife could distribute her Roth account and still have $200,000 – a big difference! 

 

Roth IRAs have more convenient features - any contributions made to a Roth IRA can be withdrawn at any time tax-free and penalty-free!  Therefore, if someone has current cash needs the actual value of a Roth IRA would be significantly more to them individually.

 

 

Conclusion

Overall, the current values listed on the property division worksheet are not useful when applied to individual circumstances and priorities moving forward.  In some cases, short term cash needs are more important versus long term retirement savings/income for others.  The real value of the property division and the actual end results has more to do with your priorities then it does relying on a 50-50 split.

 

Let’s build a property division strategy that works best for you and your future! 

You wouldn’t retire without a financial plan… it might be messy! 

 Don’t divorce without one either!

 

Get the information you need to get started here, or

Click here to schedule a free initial consultation with Amy

 

Disclosure: Divorce transition/financial planning services offered by A.M. Financial. Investment advisory services offered through WealthSource Partners, LLC ("WSP"). A.M. Financial and WSP are independent and unaffiliated entities. The statements and opinions expressed are those of A.M. Financial and Amy Mahlen and do not represent the views and/or opinions of WSP or any other associated or affiliated person of WSP. Furthermore, the statements and opinions expressed are for informational and educational purposes only and should not be construed as legal, tax, accounting or investment advice. All statements and opinions are current only as of the time made and are subject to change without notice.

 

 

 

 

 

 

Share on Facebook
Share on Twitter