#divorceadvice #financialplanning #highcostofliving #propertyownership
Considering Your Options
Going through a divorce is never easy, especially when there are significant assets involved. You’re faced with tough decisions about your financial future and where you want to live. Let’s break down some key points to consider in this situation:
Retirement and Savings
- You mentioned having 200K in retirement accounts and 65K in savings. These assets are crucial for your future financial security, especially considering your current salary and lack of additional savings.
- Emptying out your retirement and savings to give to your husband to keep the house may seem like a quick solution, but it’s important to think about the long-term implications. Consider the impact on your own financial stability and retirement plans.
Property Ownership
- Keeping the house for your high school kids may be a priority, but it’s essential to realistically assess if you can afford the mortgage payments and upkeep without depleting your savings.
- If selling the house is an option, weigh the pros and cons of renting versus buying another home in a high-cost-of-living area. Consider factors like rental prices, property taxes, and overall housing market trends.
Financial Outlook
- Given your salary and the potential lack of child support, it’s important to create a realistic budget that accounts for your day-to-day expenses, savings goals, and retirement planning.
- Age can be a significant factor in your decision-making process, especially when it comes to rebuilding your financial security post-divorce.
Ultimately, seeking professional advice from a financial planner or divorce attorney can provide you with personalized guidance based on your specific circumstances. Remember to prioritize your own financial well-being and future stability during this challenging time.
May I inquire about the why to your husband and his divorce imperative? Would better help me understand what I would do in regards to home and asset division.
I would not be inclined to drain all my accounts and take on a loan from family for a house. If you sell you would have few hundred thousand dollars in retirement money and savings to give you a good financial foundation. If you keep it, you will be in debt to family, have little to no cash and be one major home repair away from more debt and possibly needing to sell. Also, you do not have a big income to support the house and raise kids in a HCOL area, Draining your accounts does not sound like a good idea.
Some information that is missing:
1. What’s the balance on your mortgage and at what interest rate?
2. Does your mortgage payment include taxes and insurance?
3. What is your income and what are your expenses?
4. How many years do the kids have left in school?
5. What is rent on an apartment in the same school district?
Based on the information you’ve given though, I don’t know that keeping the house makes sense. If you can’t afford to put any money away for savings, I don’t see how you’ll pay for a house that’s gonna need house stuff for upkeep.
If you sold the house, You’d walk away with $100k retirement and $275k cash; that could pay for 7 years of rent at $3000 a month, which is plenty of time for the kids to graduate.
if you kept the house, you’d have zero retirement, no cash, no savings, owing somebody $140k to boot, and no ability to save anything to rebuild. Plus your hubs will want his name off the mortgage. Would you be able to refinance to do that? Do you qualify for a HELOC to pull out that kind of equity and be able to pay it back?
If you are in a HCOL on $65k per year, you may not make enough to maintain the home (taxes, insurance, repairs, etc). Consider renting and, if you’re by yourself, you can probably fit in a smaller an cheaper accomidation.
It would be tough to find a place to live under 1000 that you’re paying now. Negotiate to see if you can keep the house and he gets the retirement accounts. Since you will be taking care of the kids that should be worth something to him. Not sure why he will not be paying child support unless he’s a deadbeat.
Stay in the house. Once you start the cycle of renting, you won’t get out the house will be your savings and eventually when you sell it, you’ll have money for retirement. Do what you can to keep the house it will give your kids stability. Your equity will grow, you will have a low cost living situation. When the kids are older, you can maybe do a side hustle job to raise some money towards retirement but once you sell the home, you’ll have that money for your retirement. the house allows you to build equity and appreciate overtime, renting does not.
>There is 0% chance I will get any child support and a small chance I might have to pay alimony, but god I hope not.
Are you working with a divorce lawyer? This sounds untenable.
Even with the 1000 mortgage payment, a 600k house on a 65k salary doesn’t make sense, maybe if you’re getting spousal/child support. How big is this house? How many kids do you have?
In any case, 600k after real fees and taxes and 160k owed means 440k equity, so 220k in equity if split down the middle, and 100k each from the retirement accounts if split down the middle. I think financially speaking, it makes more sense to sell, make use of that 220k equity and either downsize to a more affordable home, or rent for a year or two as you process/grieve the emotional toll of divorce.
Note that the appraisal of the home’s value (minus the remaining loan amount) is the asset that is used for the distribution of assets calculation if you want to keep the house. If you sell, the actual net proceeds is what gets split. In other words, you don’t get to factor in real estate fees and the like if you want to keep the house. Also keep in mind that you will need to get another loan – you can’t just assume the old loan.
This is almost a carbon copy of my divorce. My ex wanted to keep the house, so she “bought me out” by giving me most of the 401K and cash.
Hasn’t worked out well for her. She is now, nearly 10 years on, house rich and cash poor. I bought my own house and my investments (S&P500) have done very well.
Now she’s in a position where she can’t afford the house and has already tapped the equity with a HELOC. But if she sells to unlock the remaining equity, whatever she buys/rents will essentially be a major downgrade and still cost about the same monthly as her present mortgage.
I appreciated that she wanted to keep the house for our HS age daughters. But I’m not sure how much that mattered as divorce sucks for teens no matter what. I wish she’d worked to save the marriage instead (divorced at her insistence).
Can you afford to keep the house and live comfortable? Will you be living paycheck to paycheck if you keep the house?
>I am not sure how often this term is used but my husband is going through a midlife crisis and wants out of the marriage. He also isn’t working at the moment which is why I assume I won’t get any child support.
Are you working with a divorce lawyer or not? A “midlife crisis” is not a free pass to walk away from your marriage guilt-free alimony-free and child support-free.
You say your husband “isn’t working at the moment”. That isn’t going to fly in divorce court. They will impute an income to him, either what he was making in his previous job, or if he is unemployable, minimum wage. If he isn’t taking custody time he will pay child support.
I don’t know what state you live in, but the circumstances for getting alimony are very limited in most US states. It’s generally considered rehabilitative rather than supporting their lifestyle. For example if your husband has been out if the workforce caring for the children he might be owed alimony to support him while he updates his job credentials.
Are you working with a lawyer? It seems expensive, but knowing your rights and getting the divorce done correctly saves you money in the long run.