Podcast Summary
Helping Individuals Navigate the Financial Complexities of Divorce: Diane Rankin, a certified financial adviser and divorce financial analyst at Northern Trust, uses her expertise in financial analysis and asset management to help individuals make informed decisions during divorce and manage assets effectively afterwards.
Diane Rankin, a certified financial adviser and certified divorce financial adviser at Northern Trust, specializes in helping individuals navigate the complex financial aspects of divorce. With over 26 years of experience in the financial services industry, she has a deep understanding of financial analysis and asset management. Her certification as a divorce financial analyst allows her to identify hidden assets, help shape settlements, and manage assets prudently. Northern Trust, where Diane works, is a well-established company known for its expertise in managing assets, particularly during life transitions. By working with attorneys and clients, Diane assists in making informed decisions about the distribution of assets in divorce settlements and ensures that those assets are managed effectively moving forward.
Managing newfound wealth during divorce: During divorce, carefully manage newfound wealth to avoid overspending and financial instability. Seek guidance from a financial advisor like Diane Rankin for emotional and practical support.
During divorce proceedings, it's crucial for the spouse who receives a significant amount of assets to carefully manage their newfound wealth. This is often referred to as "sudden acquired money syndrome," and can lead to overspending and financial instability. Another important consideration is adjusting to a new lifestyle and understanding the long-term financial implications of various decisions, such as keeping the family home. A financial advisor, like Diane Rankin, can provide valuable guidance and help navigate these complexities. Diane's background in psychology and music adds depth to her expertise, providing a unique perspective on the emotional and practical aspects of managing money during a divorce.
Considering Factors for Optimal Social Security Benefits During Divorce: Divorcing individuals should weigh the pros and cons of starting Social Security benefits early versus late, considering factors like their age, retirement plans, and family history of longevity.
Effective planning for Social Security benefits in the context of divorce involves considering various factors, including the age at which one can start receiving benefits, the potential benefits of delaying benefits, and the impact of early versus late retirement. For instance, individuals can start thinking about Social Security at age 62, but the normal retirement age is 66. Waiting until after 66 to take benefits results in an 8% increase in benefits per year up to age 70. Conversely, taking benefits before 66 results in a 7% reduction per year. The break-even age for making up for the difference between early and late retirement benefits is around 77 or 78. Therefore, considering one's family history of longevity and personal circumstances is crucial when deciding the optimal age to start receiving Social Security benefits during and after a divorce.
Social Security benefits for spouses: Spouses can receive half of their partner's Social Security benefits if they've been married for over 10 years, even if they didn't work. Benefits increase if the spouse waits until 70 to start receiving them, and the other spouse's benefits aren't affected.
Social Security benefits can be shared between spouses, even if one spouse never worked. This was illustrated in the discussion about George and Helen, where Helen, who stayed home to raise their children, was eligible to receive half of George's benefits since they had been married for over 10 years. This rule applies as long as the spouse seeking benefits is over age 62 and the couple has been married for a decade. The earliest age to start receiving these benefits is 62, but waiting until age 70 results in an 8% increase in benefits annually. The spouse's benefits do not reduce the amount George receives, and he doesn't need to be involved in the process. If George remarries, his new spouse can also receive benefits if they've been married for 10 years. However, if Helen remarries, she would lose her eligibility for George's benefits and would instead receive her new husband's benefits. This discussion highlights the importance of understanding the rules regarding Social Security benefits for spouses and how they can provide financial security for both parties.
Social Security benefits depend on individual earnings history and marital status: Social Security benefits vary based on earnings history, and married individuals may be eligible for survivor or spousal benefits. Women are encouraged to collect benefits to avoid destitution. Stay informed about your benefits, and apply before age 70 to avoid missing out on potential payments.
Social Security benefits vary based on individual earnings history, and there are specific rules regarding when and how much a person can collect. For married individuals, if one spouse passes away or decides to stop working, the other spouse may still be eligible for benefits. However, the amount of benefits received depends on the earnings history of each spouse. Women, in particular, are encouraged to receive Social Security benefits to avoid destitution. It's essential to stay informed about your benefits and when to start collecting, as there are no retroactive payments. The latest age to apply is 70, and if you forget, you'll start receiving benefits at that age but won't receive any back payments. Divorced spouses can also collect benefits from their ex-spouse's earnings as long as they've been divorced for at least two years. Social Security taxes apply to wages earned while receiving benefits, and the tax rate depends on the individual's income. There is ongoing debate about the future of Social Security, but it's expected to be around in some form for future generations, with many young people cobbling together various income sources to secure their financial future.
Applying for Social Security benefits during retirement planning: Social Security benefits are essential, apply online, not considered assets in divorce, and discovery requests can be made.
Social Security benefits are an essential part of retirement planning for many individuals, including those in the gig economy or with multiple jobs. Applying for these benefits is a straightforward process that can be done online without the need for in-person visits or phone calls. Social Security benefits are not considered an asset to be divided in divorce proceedings but may be considered as income for child or spousal support calculations. Discovery requests regarding Social Security benefits can be made during divorce proceedings to determine each spouse's entitlement, and prenuptial agreements cannot waive Social Security benefits.
Unconventional marriages and Social Security benefits: Even in unconventional marriages, spouses may be entitled to Social Security benefits. Proof of relationship may be required, and mega wealthy individuals getting divorced face unique challenges.
Even in unconventional marital situations, such as common law marriages or annulled marriages, the spouse may still be entitled to Social Security benefits, referred to as "punitive spouses." This can be a complex issue, and individuals in such situations may need to provide proof of their relationship, such as tax records or a family law judgment, to the Social Security Administration. For those planning to leave a marriage, it's important to remember that the spouse will need their Social Security number and information about their birthplace and parents to claim benefits. Additionally, mega wealthy individuals getting divorced, like Jeff Bezos, raise interesting questions about how much wealth is enough and the challenges of dividing vast assets. Overall, it's crucial to stay informed about Social Security benefits and asset management, and individuals can contact wealth managers or consult the Social Security Administration's website for further guidance.
Wealth and Divorce: Rational Behavior Not Guaranteed: Wealth does not ensure rational behavior during divorce proceedings. Proper planning is essential for non-traditional family structures.
Wealth does not guarantee rational behavior during divorce proceedings. The example of real estate tycoon Harry Macklowe, who publicly displayed his new relationship with a younger French girlfriend on a billboard after his bitter divorce from his wife, illustrates this point. Furthermore, the increasing complexity of modern families, as shown in another article about a woman discovering her husband's secret 47 children from sperm donations, highlights the need for comprehensive estate planning in non-traditional family structures. As our trusts and estates expert mentioned, we live in a time where families are no longer limited to traditional structures, and proper planning is essential to ensure that unexpected beneficiaries are accounted for.