Download Your Guide to Divorce Settlements: Can You Afford to Keep the House After Divorce?
A settlement can look equal on paper and still leave you short on cash. Follow the numbers from this episode’s example to see how housing costs, monthly expenses, and retirement savings affect life after divorce—and what to ask before you agree to a settlement.
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Can You Afford Your Divorce Settlement After Divorce?
Getting half the assets may sound fair. But the value of a settlement on paper does not tell you whether you can afford your life afterward. In this episode of We Chat Divorce, Karen Chellew and Catherine Shanahan use a hypothetical couple to show why the assets you receive—and when you can use them—matter as much as the total.
One spouse wants to keep the house. The proposed settlement gives her $800,000 in home equity and $200,000 in cash, but her expected expenses exceed her take-home income by $2,000 a month. That cash may need to cover the shortfall, home repairs, and other unexpected costs. Keeping the house could still be the right choice, but she needs to understand what it will cost before agreeing.
The other spouse receives most of his share in retirement accounts. Those funds are valuable for the future, but using them for housing or immediate expenses may have tax consequences. Karen and Catherine also explain why it matters to track where bill payments are coming from during the divorce, check current account statements, and confirm that any refinancing plan is realistic.
Before you agree to a settlement, look beyond the total. Can you pay your expenses, handle a surprise, and protect your future? Download the episode worksheet to follow the example and start asking those questions about your own financial picture.