Divorce can hurt the pocketbook in ways that some people don’t expect.
Lost income, child support, spousal support all hurt. But there are other ways that divorce affects finances, said Samantha Fraelich, vice president of Bernard R. Wolfe & Associates, a Chevy Chase, Md., wealth management firm. Here are five of them:
Legal expenses: Be prepared to spend thousands of dollars on legal expenses, even if the divorce is amicable. If it’s contested, expect to spend much more.
Childcare expense: Without another parent in the household, divorced parents often need to pay more for childcare than they expected.
Taxes: Going from married, filing jointly, to single filing status can significantly increase taxes.
Retirement planning: Without two people contributing, retirement planning expenses can increase after divorce. Pension, IRA and 401(k) distributions will often be significantly lower too. “It is usually helpful to get a retirement plan run by a professional before you actually sign divorce paperwork,” Fraelich said.