JGI/Jamie Grill/Getty Images
- My divorce was more amicable and less stressful than many, but even so, it was chock-full of unexpected financial landmines.
- I’ve learned that everything is more expensive when you’re single, from taxes to insurance to your phone service.
- Not only does spousal support leave me without disposable income, but the division of assets torpedoed both of our retirement plans.
- Here are the biggest surprises I wish I had known before we started our divorce.
- Visit Business Insider’s homepage for more stories.
In a few months, I will pass one of the sadder milestones in my life — I’ll have been divorced for about two years. After a 30-year marriage that spanned my entire post-college adult life, I’m still not used to the idea of being single again.
My wife and I split amicably, opting for a mediator rather than a lawyer, which saved us an enormous amount of money. We sold our home without much trouble and divided the relatively meager equity between us. We each already had a car — both were in my name, so I transferred my wife’s title to her. She moved away, to be closer to our grown kids. I moved a shorter distance, into an apartment in the heart of Los Angeles.
Read more: My divorce cost me $17,695 — these were the most surprising expenses I faced
Life after divorce has been full of surprises. Everything from becoming my own accountant again after my wife paid the bills every month for decades, to doing my laundry and all the household chores has been an on-the-job learning experience for me. And while I thought I was headed into the divorce process fully aware of the financial implications, the reality of divorce still manages to catch me off guard, again and again.
Here are eight things I wish I had known before I got divorced.
My federal income taxes will be a lot higher this year
Flickr / Ali Edwards
This is one of those things that I knew intellectually but hadn’t really internalized until recently. After all, I haven’t filed taxes as an individual since I was fresh out of college. Virtually all of my tax returns had the "married filing jointly" box checked, and I could take advantage of the somewhat more generous deduction for families.
For this year, I ran an online tax calculator to see how my tax exposure was likely to change for 2019. Plugging in an estimated $60,000 income and a few other hypothetical values, I ran the math twice, comparing married filing jointly to filing as an individual.
The result? My liability appears to be about $7,000, nearly twice what it would be before the divorce, all other things being equal.
Spousal support is a distressingly large chunk of my income
Shutterstock
Let me be perfectly clear: I am not complaining about having to pay spousal support. For 30 years, I was either the sole or principal breadwinner in our household, and consequently, my wife never needed to pursue a career. Now that she does need to pay all her bills, I need to help out.
But during the initial meetings with the mediator and through the majority of the divorce process, I didn’t give a lot of thought to what the spousal support agreement would actually be.
It turns out that the judgment is a lot of money, relatively speaking — about 20% of the take-home pay I was earning at the time of the divorce. As someone who probably doesn’t think hard enough about budgets, saving, investment, and retirement, it only became apparent to me when I started writing those checks after the divorce that this money accounts for virtually all of my disposable income.
And since I’m now a freelancer without a 401(k) quietly building equity in the background, I’m worried that I am not going to be prepared for the retirement age that’s rushing towards me like a speeding train.
To change your support agreement, you have to pay to go back to court
Flickr / Joe Gratz
Your mileage may vary. If you’ve only been married a few years, spousal support might only last a few years — enough time for the lower-salaried spouse to get back on their feet and start a career. But we were married 30 years (just slightly longer than "The Simpsons" has been on the air), and that means, in the eyes of the court, that I’m obligated to pay support indefinitely.
Of course, the terms can be modified. If my wife were to remarry, start earning more money than me, or win the lottery, we could head back to court to revise or terminate the agreement. But that’s expensive, time-consuming and is sure to open old wounds. Or, more likely, aggravate raw wounds that are unlikely to ever heal properly.
So it’s unlikely I’ll ever request any changes to the spousal support agreement — I will do my best to pay the amount, even though it was based on a salary I no longer have. The only reason I’d ask for the terms to change is if she really does win the lottery.
See the rest of the story at Business Insider
See Also:
- I moved from China to the US — here are the 14 most disappointing aspects of American culture
- 17 slang words teens and Gen Z-ers are using in 2019, and what they mean
- 18 countries with more exhausting workweeks than the US
SEE ALSO: 6 things wealthy people do to protect their money when they get married
DON’T MISS: I’m a conservative who moved to a liberal city, and I was surprised to see my views change on several issues
Source: Business Insider – feedback@businessinsider.com (Dave Johnson)