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Re-evaluating retirement options following divorce

As a Colorado couple ages, retirement planning becomes more prominent in the family's budgeting and investment strategies. Many couples spend a great deal of time discussing their vision of the golden years, and planning how they will fund this portion of their lives. However, when divorce enters the picture, retirement plans come crashing down. And each spouse is left to pick up the pieces and rebuild a retirement strategy as a single person.

This can be a difficult task, especially if the divorce is particularly contentious or otherwise emotionally draining. That's why some experts advise taking a short emotional 'break' from the process and putting any money that is obtained from the divorce into a target-date fund. This allows the money to sit in a diversified portfolio until the individual has a chance to research and evaluate other investment options.

Another consideration involves how to transfer any employer-funded retirement accounts that one may receive as a part of the divorce settlement. In many cases, the best option is to convert those funds into an IRA. However, each financial scenario is different, and newly divorced individuals may wish to consult with a financial planner regarding the best available options.

When divorce is on the horizon for a Colorado couple, the best course of action is to fully understand the financial ramifications of any and all choices. Women in particular can take a hard financial hit following divorce; one report states that a woman's household income drops by as much as 41 percent after divorce. Making savvy choices during and immediately after the process is imperative to secure a well-funded retirement.

Source: CNN Money, "Rebuild your nest egg after divorce," Beth Braverman, Donna Rosato and Penelope Wang, Feb. 21, 2013

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