Advice on my budget -Update #52, new question #53!

[cjzimmer1]

Personally I think the car maintenance at $50 a month seems low. An oil change can cost close to that, a set of tires can be $300-600 or more depending on the vehicle (and with an suv I would expect them to be higher), plus other routine maintenance that needs doing. You don't want to be hitting the emergency fund just because the vehicle needs the Sparks plugs replaced for example. Obviously these things won't happen every month but the $600 a year you have budgeted seems low to me for what we spend on maintenance a year and I'm not in a high cost f living area and vehicle are pretty new too.

Edited July 26, 2016 by cjzimmer1

[Home'scool]

Some really excellent responses! I knew you gals were smart!

 

Some of the things I am thinking of tweaking:

 

• I think I will reduce the vacation fund from $400 to $200. I can't even envision myself going on vacation every year. Like I said, I am such a homebody that I am just as happy being around the house.
• The $2000 a month that I am putting aside will be put into a 401K or some other type of retirement fund.
• Right now I am under my STBX's health insurance. I am hoping that will remain, but if it doesn't I will work an amount in. Right now his insurance covers health and dental and I know that if I can no longer continue under his he will be contributing an amount towards my payment.
• I do have a lot of money budgeted towards "wants". I will be reducing that. Also, the budget, as it stands now, is a bit padded. When I put $30 per month per pedicure I usually only go during the summer months. Once socks go on, feet get ignored! But I wanted to have more budgeted than I think I will need and then I can always just move it over into savings. I do, however, want to identify the most I can put away in savings and put that away first before anything else instead of waiting until the end of the month for any leftover money
• Right now my STBX's 401K has about 500K in it. Half will be earmarked for me and he will continue to contribute into it. When I retire I will get half of what the balance is at that time. I am hoping that whatever I save can be used towards buying a small condo somewhere for my sister and I to live in with hopefully zero to minimal mortgage.

I want to be able to sleep at night knowing that, if I had to, I could live on my own and not end up on the street. So to that end I need to save as much as possible as quickly as possible.

 

 

 

[Home'scool]

Another question:

 

If there is any debt left over after we sell the house, should I entertain having him take over the debt and taking a smaller amount in alimony, or should I take some of the debt and higher alimony payments?

 

Right now we should be able to sell the house, pay of any credit card debt and still each get a chunk of money. But, we have parent loans we took out for our girl's college education. I don't know how much the total is, maybe close to 100K, and I know we have money set aside in a education fund, maybe 40K, but there is a possibility there may be some debt once all the dust settles. I am not sure how to approach that one.

[JustEm]

Personally I think the car maintenance at $50 a month seems low. An oil change can cost close to that a month, a set of tires can be $300-600 or more depending on the vehicle (and with an suv I would expect them to be higher), plus other routine maintenance that needs doing. You don't want to be hitting the emergency fund just because the vehicle needs the Sparks plugs replaced for example. Obviously these things won't happen every month but the $600 a year you have budgeted seems low to me for what we spend on maintenance a year and I'm not in a high cost f living area and vehicle are pretty new too.

 

An oil change costing $50 a month? where do you get your oil changed? We get ours changed every 5000 miles per the recommendation and they only cost $50. So that roughly $50 every 3 or 4 months. Plus, with a new car the maintenance should not come close to $600 a year. Our car is 3.5 years old and we have yet to have a single issue with it. So just oil changes, tire rotation, and air filter changes. We have a lovely maintenance fund built up and only put away $25 a month. As it gets older we will put more away for maintenance though.

[Prairie~Phlox]

Good luck to you, all I can say is wow, if I had that kind of money coming in, I'd be set for life.

[Luckymama]

OP, i suggest you make an appointment with a Certified Financial Planner on an per-hourly or per-plan basis. The CFP would be able to illustrate how long your money will last if you do A, B, or C or if X, Y, or Z were to occur.

 

CFPs act as a fiduciaries for their clients so one does not have to worry about being "sold" something not in one's best interests.

 

www.letsmakeaplan.org

[Home'scool]

OP, i suggest you make an appointment with a Certified Financial Planner on an per-hourly or per-plan basis. The CFP would be able to illustrate how long your money will last if you do A, B, or C or if X, Y, or Z were to occur.

 

CFPs act as a fiduciaries for their clients so one does not have to worry about being "sold" something not in one's best interests.

 

www.letsmakeaplan.org

 

I definitely plan to. I just wanted to start laying some groundwork and start getting some ideas of different things to do so I can ask some intelligent questions once I get there!

[Home'scool]

Good luck to you, all I can say is wow, if I had that kind of money coming in, I'd be set for life.

 

I don't feel that way -- I feel panicky. I have no idea what the future looks like .... I have no idea what a good amount to retire is. I feel like I only have 15 years to get this all together before I retire. I don't want to work when I am 75.

 

My role model was my mother and, like I said, she had plenty of money and ended up bankrupt. She did spend like a drunken sailor, and my stepfather managed to spend like a sailor on crack!

 

I am very happy to have a simple life, a small, safe place, and enough money to finally feel, for once in my life, like I am sheltered against whatever life throws at me.

[BarbecueMom]

I haven't seen this mentioned yet, but you may want to look into what kind of tax changes you'll be facing next year or two, and prepare for that. Between the divorce, divided assets, and whether or not you can claim your daughters as dependents, you may end up with an unexpected tax bill.

[purplejackmama]

I suck at money. It's like a thorn in my side. So now I need YOUR help, op. How will you work this budget? How do you physically keep all these categories separate? I've never understood how ppl do that.

 

I have this problem that when the money is there, we spend it. So how have you found to solve this? When you say you are "padding" some of these categories, how will you keep from spending the extra pad?

[Faithful_Steward]

Take a look at your food budget. You have $900/mo budgeted between groceries, work lunches, and eating out. For one person? I'd find a way to make that $ work for you instead of eating it.

 

You are relying on future income that I wouldn't necessarily consider reliable (alimony, ss, kindness of your sister). I think saving should be more of a priority than you are making it. I also think you can do that fairly painlessly by trimming discretionary spending to a number that doesn't deprive you but still requires effort/attention to maintain.

[mommyoffive]

Yes your food budget is kind of high.  We feed a family of 7 for 600 ish a month.  

 

Taxes

 

So you are going to get the 250k and whatever that balance grows to?  Or you are going to get half of his contributions after that too? 

 

I wouldn't put working when you are older out of the question.  Not that you want to be forced into, but it might be nice to have something to keep you busy.

 

If you are nervous about your future I would meet with CFP.  Before that run calculators and see how much you have, how it will grow, and how much you can take out.

 

 

[Home'scool]

Yes your food budget is kind of high.  We feed a family of 7 for 600 ish a month.  

 

Taxes

 

So you are going to get the 250k and whatever that balance grows to?  Or you are going to get half of his contributions after that too? 

 

I wouldn't put working when you are older out of the question.  Not that you want to be forced into, but it might be nice to have something to keep you busy.

 

If you are nervous about your future I would meet with CFP.  Before that run calculators and see how much you have, how it will grow, and how much you can take out.

 

Right now my daughter is living with me for the summer until she goes back to school so that is adding to the budget. 9 months out of the year I will be only buying groceries for myself. I do go out to eat a lot so I can cut down on that.

 

Taxes! Yes, I have to account for those. I know alimony is taxable so I do want to account for all that. That is where a financial person can help me, but thank you for reminding me.

 

For the 401K I get half of whatever the balance is 15 years from now.

Edited July 26, 2016 by Home'scool

[Guest]

I suck at money. It's like a thorn in my side. So now I need YOUR help, op. How will you work this budget? How do you physically keep all these categories separate? I've never understood how ppl do that.

 

I have this problem that when the money is there, we spend it. So how have you found to solve this? When you say you are "padding" some of these categories, how will you keep from spending the extra pad?

Not the OP, but two solid ways of doing this: physical envelope system, or digitally through YNAB or similar program. The envelope system is an old, pre-digital tech way that Larry Burkette used to advicate, and which Dave Ramsey appropriated in his concepts. Basically, you have literal envelopes with lables on them: "Food," "Clothing," etc. and if the envelope is empty, you are done for that month, or you have to steal from a different envelope.

 

Personally, I never liked physical envelopes; it's too fumbly and many purchases go in multiple categories for me. Therefore something like You Need A Budget is better. (Although I am back to my spiral notebook method from before; YNAB is subscription now and I don't have that.)

[mommyoffive]

Right now my daughter is living with me for the summer until she goes back to school so that is adding to the budget. 9 months out of the year I will be only buying groceries for myself. I do go out to eat a lot so I can cut down on that.

 

Taxes! Yes, I have to account for those. I know alimony is taxable so I do want to account for all that. That is where a financial person can help me, but thank you for reminding me.

 

For the 401K I get half of whatever the balance is 15 years from now.

 

Ahh

About the food. So that will be lower a lot of the time.  So will your car insurance at some point.

 

 

You get half of the full 500k balance at whatever point?  

[Home'scool]

I suck at money. It's like a thorn in my side. So now I need YOUR help, op. How will you work this budget? How do you physically keep all these categories separate? I've never understood how ppl do that.

 

I have this problem that when the money is there, we spend it. So how have you found to solve this? When you say you are "padding" some of these categories, how will you keep from spending the extra pad?

 

Right now I have an app on my phone called DollarBird. It has categories like "Fuel" and "Dining" all set up and you can add your own. Every time I spend money I just add it on there. It then tells me how much I spent every month and how much I spent in each category. There are also ways to put in income and future spending, etc., but right now I only use it to track my day to day expenses.

 

I also have a 3-ring binder with monthly sheets with all the categories listed. I plan to fill in the amounts weekly to make sure I stay on budget and then anything left over at the end of the month will go to a savings account.

 That's the plan. I am hoping to stick to it!

[Guest]

Take some time and educate yourself on medical. You may find long term that you need to consider an HSA now, to pay medicare and dental premiums and cost-sharing when you are older.

[Home'scool]

Ahh

About the food. So that will be lower a lot of the time.  So will your car insurance at some point.

 

 

You get half of the full 500k balance at whatever point?  

 

Right now the 401K is at 500K. When I turn 65 in 15 years I will get half of whatever the balance is at that point. He will continue to contribute for the next 15 years and then I will get half of the value at that time.

 

He makes waaaay more than me. And the only reason he makes so much is because I supported him by moving multiple times through our marriage and sacrificing whatever it took so that he could forward his career. He knows that.

[SereneHome]

May be it's a cynical side of me, but right now it sounds like your finances will still hugely depend on your husband.  Both, monthly and future ones.  do you really want to tie yourself that much to the person you are divorcing? 

 

I don't know anything about divorce agreements and whether they can be challenged later, but alimony, continuing participation in his 401K and him paying for your medical - sounds like he is contributing a LOT!  What if he meets someone else, remarries and in 5 yrs wants to challenge all that?

 

I would try to set up a budget based solely on what is yours.  If you do get part of his $$$ - that's just icing on the cake.

 

But like I said - I tend to be on a conservative side of things

[TechWife]

 

 

For the 401K I get half of whatever the balance is 15 years from now.

 

Is he going to be required to continue contributing to it? 

 

Here's a quick, easy to understand article on how 401K's work and how to estimate their future value: 

 

http://www.howstuffworks.com/retirementcalc.htm

[Annie G]

What does your lawyer say about how to divide up the student loans and credit card debt? 

 

I'm gobsmacked that your dh is going to be required to continue to work and pay into his 401K and then give half to you after 15 more years. Sure, dividing it up now is reasonable, but between this, alimony that lasts forever and his paying money for your healthcare, it seems like you really have a sweet deal going.  

 

I'm sorry you're going through a divorce- that's never fun- but I hope you have a good lawyer because this really seems to be too good to be true and I hope his lawyer isn't embedding something unpleasant into the settlement.  

[Home'scool]

What does your lawyer say about how to divide up the student loans and credit card debt? 

 

I'm gobsmacked that your dh is going to be required to continue to work and pay into his 401K and then give half to you after 15 more years. Sure, dividing it up now is reasonable, but between this, alimony that lasts forever and his paying money for your healthcare, it seems like you really have a sweet deal going.  

 

I'm sorry you're going through a divorce- that's never fun- but I hope you have a good lawyer because this really seems to be too good to be true and I hope his lawyer isn't embedding something unpleasant into the settlement.  

 

I am assuming he will only be paying alimony until I turn 65, not forever. Although I would love that, I don't think that will be happening.

 

Also, I am not sure about the healthcare. When we met with the mediator she said something about if I could not stay under his family plan then I would have to get healthcare and he would have to pay the difference of something -- I am not sure what, there was a lot of information given that meeting. I should be getting a draft of the settlement within a week so that will clarify some things.

 

It is also my understanding that he will keep contributing to the 401K and then I will get half of the total balance in 15 years. I could be wrong but that is how I interpreted what the mediator said. I will be bringing the settlement to my own lawyer for review before signing anything

Edited July 26, 2016 by Home'scool

[Arcadia]

During the recession years, hubby's colleague stop 401k contributions because there was a pay freeze and pay cuts. So people do stop contributing and since hubby's is employee matching, it means no 401k contributions from employer either.

They couldn't liquidate shares as share price was very low so it made more sense to stop 401k contributions temporarily.

[cjzimmer1]

An oil change costing $50 a month? where do you get your oil changed? We get ours changed every 5000 miles per the recommendation and they only cost $50. So that roughly $50 every 3 or 4 months. Plus, with a new car the maintenance should not come close to $600 a year. Our car is 3.5 years old and we have yet to have a single issue with it. So just oil changes, tire rotation, and air filter changes. We have a lovely maintenance fund built up and only put away $25 a month. As it gets older we will put more away for maintenance though.

The 50 "a month" for the oil was a typo on my part just 50 per change. As far as maintenance go we always do the recommended maintenance to get maximum life, Dh and I know nothing about cars so we are happy to pay someone else to check belts, top fluids etc, for the piece of mind that everything is running right. I'm sure it is somewhat dependent on how many miles one drives, but our 4 year old car is already on its second set of tires to the tune of 400 our van's tires run closer to 600 and will need replacing next year (it's only 2 years old), those tires alone would be a years money on her budget and leave nothing for oil changes and other small maintenance items. I fully expect maintenance on the suv to be equal or more than our van ( which is higher than our car even though it is newer). Bigger vehicles cost more than cars.

[TechWife]

I think you need to clarify the continued contributions to the 401K. Is he going to be required to put in a certain amount? What happens if he changes employers?

Edited July 26, 2016 by TechWife

[cjzimmer1]

I think you need to clarify the continued contributions to the 401K. Is he going to be required to put in a certain amount? What happens if he changes employers?

I also wonder if anything prevents him from borrowing from the account and not paying it back. Yes he would take a tax hit but that would be less than giving her half. And if it's gone how can the court make him give her half in 15 years.

[Alessandra]

You have got such good ideas in the posts, but, to me, your financial planning skills need a great deal of help and support. I think it's great that you are dealing with this and planning to track expenses, etc. what an excellent first step!

 

But I agree with those who suggest you see a real life CFP. Looking at your first post, I saw that items that could be considered discretionary added up to over $12,000 per year. But no money allocated for taxes, medical care, things that are pretty major budget categories. I see you are revising, but the fact that you began that way gives me pause.

 

It sounds as though the divorce has not yet been finalized? You might want to be prepared to pay for health care. For the dh retirement account, are you saying that you will get a share of dh contributions made after the divorce? That sounds unusual. Are you getting any lump sum payments, perhaps in lieu of future payments? Many attorneys will suggest that.

 

Also, it sounds as though you are counting on your dh a lot. Are you the beneficiary of a life insurance policy if he dies? Your dh could be the nicest person in the world, but his attorney may convince him not to agree to the generous terms you are talking about now. You mentioned a mediator -- you do have an attorney yourself, don't you? (Sorry, I skimmed some of the posts.) and you seem to be counting on your sister -- that situation could change if she loses a job, moves away, etc.

 

ETA

Oh, I see you do have an attorney. But the mediator proposed a settlement without your attorney being present?

Edited July 26, 2016 by Alessandra

[Alessandra]

What does your lawyer say about how to divide up the student loans and credit card debt? 

 

I'm gobsmacked that your dh is going to be required to continue to work and pay into his 401K and then give half to you after 15 more years. Sure, dividing it up now is reasonable, but between this, alimony that lasts forever and his paying money for your healthcare, it seems like you really have a sweet deal going.  

 

I'm sorry you're going through a divorce- that's never fun- but I hope you have a good lawyer because this really seems to be too good to be true and I hope his lawyer isn't embedding something unpleasant into the settlement.

 

  

I am assuming he will only be paying alimony until I turn 65, not forever. Although I would love that, I don't think that will be happening.

 

Also, I am not sure about the healthcare. When we met with the mediator she said something about if I could not stay under his family plan then I would have to get healthcare and he would have to pay the difference of something -- I am not sure what, there was a lot of information given that meeting. I should be getting a draft of the settlement within a week so that will clarify some things.

 

It is also my understanding that he will keep contributing to the 401K and then I will get half of the total balance in 15 years. I could be wrong but that is how I interpreted what the mediator said. I will be bringing the settlement to my own lawyer for review before signing anything

I have to agree with Annie. Something sounds very off here.

[Guest]

I doubt the unlimited health care scenario...I think you will be limited in some way, probably by using the alimony to cover what the plan doesn t cover. There is just so much not covered ... root canals, dental implants, lasik, certain cancer treatme nts, etc add up fast.

[Alessandra]

Right now my daughter is living with me for the summer until she goes back to school so that is adding to the budget. 9 months out of the year I will be only buying groceries for myself. I do go out to eat a lot so I can cut down on that.

 

Taxes! Yes, I have to account for those. I know alimony is taxable so I do want to account for all that. That is where a financial person can help me, but thank you for reminding me.

 

For the 401K I get half of whatever the balance is 15 years from now.

If your dd will be living with you, child support could be a possibility. Also, consider single/head of household filing status for taxes. Not sure of age, income of your kid(s), so that may not be relevant. Edited July 26, 2016 by Alessandra

[Home'scool]

You have got such good ideas in the posts, but, to me, your financial planning skills need a great deal of help and support. I think it's great that you are dealing with this and planning to track expenses, etc. what an excellent first step!

 

But I agree with those who suggest you see a real life CFP. Looking at your first post, I saw that items that could be considered discretionary added up to over $12,000 per year. But no money allocated for taxes, medical care, things that are pretty major budget categories. I see you are revising, but the fact that you began that way gives me pause.

 

It sounds as though the divorce has not yet been finalized? You might want to be prepared to pay for health care. For the dh retirement account,mare you saying that you will get a share of dh contributions made after the divorce? That sounds unusual. Are you getting any lump sum payments, perhaps in lieu of future payments? Many attorneys will suggest that.

 

Also, it sounds as though you are counting on your dh a lot. Are you the beneficiary of a life insurance policy if he dies? Your dh could be the nicest person in the world, but his attorney may convince him not to agree to the generous terms you are talking about now. You mentioned a mediator -- you do have an attorney yourself, don't you? (Sorry, I skimmed some of the posts.) and you seem to be counting on your sister -- that situation could change if she loses a job, moves away, etc.

 

ETA

Oh, I see you do have an attorney. But the mediator proposed a settlement without your attorney being present?

I know my financial planning skills need a lot of help :) Once the divorce is finalized I will definitely, without a doubt, be hiring a financial planner. I consider that money will spent.

 

The divorce is not yet finalized. I have not even seen a settlement offer yet. We just met with the mediator to go over how the process would be handled. We discussed the fact that we do not have a lot to dispute (no visitation issues, childcare payments, investment property, etc.) It is just a basic nuts and bolts divorce. We have been married for 28 years. Like I said, he makes waaaay more than me. I could be wrong about the 401K contributions. The way she explained it made it sound like the 401K stays as one account (more interest accrued that way) but that 50% of it is deemed as mine through some sort of filing. When I retire 1/2 is mine. Perhaps it is only the future value of today's amount. This would be a good point to bring up for the settlement though.

 

The way I look at it is this: Any money he is making is a direct result of the support that I provided over the years. I am also going to ask for a percentage of any bonuses he gets in the future. He is in a job that gives him bonuses because I supported him to make that happen. Now, maybe I won't get that, but that is what I will be asking for.

 

He does have an insurance policy that will have to be maintained.

 

As far as my sister -- I know no one knows what the future will bring (hence my being divorced after 28 years!) but we have always been very, very close. She is relying on me for certain things also. She is a homemaker and has no source of income. I am making money and have the ability to save. I am planning on saving as much as I can to buy us a condo in a few years. She will benefit from that.

[Sun]

I don't feel that way -- I feel panicky. I have no idea what the future looks like .... I have no idea what a good amount to retire is. I feel like I only have 15 years to get this all together before I retire. I don't want to work when I am 75.

 

My role model was my mother and, like I said, she had plenty of money and ended up bankrupt. She did spend like a drunken sailor, and my stepfather managed to spend like a sailor on crack!

 

I am very happy to have a simple life, a small, safe place, and enough money to finally feel, for once in my life, like I am sheltered against whatever life throws at me.

 

:grouphug:  It will get better, and it will start to feel ok. It really will.

 

You've gotten a lot of great advice, but I wanted to add something about changing how you look at money. I've been reading a lot of frugality blogs, forums, and websites, and it's been changing my attitudes toward money for the better. This is akin to the advice someone gave above to read Your Money or Your Life. Right now you're embarking on a big life change, and I think this might be a great time to try to live really frugally with a few splurges for a while. Living frugally for a while would help you build up your emergency savings and your retirement savings much more quickly, and sooner is always better for those types of things.

 

I've been getting a lot of good out of Reddit's personalfinance and financial independence groups. I've also been reading Mr. Money Mustache a lot. That kind of frugality doesn't come naturally to me and still strikes me as more extreme than I'm ready for, but reading about it has really helped me change my perspective on daily purchases vs. long-term savings. I've started tracking my "non-expenditures." These are the things that I would have purchased without a thought before I started to focus more on savings. I'm really enjoying seeing that number grow, and I find I get at least as much pleasure out of watching that number creep up as I would out of buying/doing whatever I was thinking about.

 

Since you commented that you've always had troubles with money management, I wonder if reading the thoughts of people who are very focused on it could be helpful to you as well!

 

[Laura Corin]

For the 401K I get half of whatever the balance is 15 years from now.

If your ex remarries, the new partner could reasonably claim half of future contributions.

 

For comparison, my parents were married for twenty years, and my mother received alimony until she turned 60. However, she didn't get any future value of his career earnings, despite her support of his career up to that point. When my father died, his entire assets went to his second wife.

Edited July 26, 2016 by Laura Corin

[Alessandra]

The way I look at it is this: Any money he is making is a direct result of the support that I provided over the years. I am also going to ask for a percentage of any bonuses he gets in the future. He is in a job that gives him bonuses because I supported him to make that happen. Now, maybe I won't get that, but that is what I will be asking for.

.

I would be conscious of the difference between getting future income that is promised versus assets that you get now. Things that are promised have to be collected, not always as easy as one might hope.

[Annie G]

:grouphug:  It will get better, and it will start to feel ok. It really will.

 

You've gotten a lot of great advice, but I wanted to add something about changing how you look at money. I've been reading a lot of frugality blogs, forums, and websites, and it's been changing my attitudes toward money for the better. This is akin to the advice someone gave above to read Your Money or Your Life. Right now you're embarking on a big life change, and I think this might be a great time to try to live really frugally with a few splurges for a while. Living frugally for a while would help you build up your emergency savings and your retirement savings much more quickly, and sooner is always better for those types of things.

 

I've been getting a lot of good out of Reddit's personalfinance and financial independence groups. I've also been reading Mr. Money Mustache a lot. That kind of frugality doesn't come naturally to me and still strikes me as more extreme than I'm ready for, but reading about it has really helped me change my perspective on daily purchases vs. long-term savings. I've started tracking my "non-expenditures." These are the things that I would have purchased without a thought before I started to focus more on savings. I'm really enjoying seeing that number grow, and I find I get at least as much pleasure out of watching that number creep up as I would out of buying/doing whatever I was thinking about.

 

Since you commented that you've always had troubles with money management, I wonder if reading the thoughts of people who are very focused on it could be helpful to you as well!

 

 

I'm nowhere near as frugal as the folks on Mr. Money Mustache, but reading those forums has really helped me focus on savings and monitoring those discretionary expenses.   It's a great website!

Edited July 26, 2016 by Annie G

[Carol in Cal.]

What, no 'books!' category???  :)

 

I agree with others that there is something 'off' about the 401K scenario.

 

Also, while I do think it's good to be frugal, you don't want a frugal budget for your divorce negotiations.  You want a full fledged 'this is what my lifestyle was like when I was married' type budget for those.

[Annie G]

I know my financial planning skills need a lot of help :) Once the divorce is finalized I will definitely, without a doubt, be hiring a financial planner. I consider that money will spent.

 

The divorce is not yet finalized. I have not even seen a settlement offer yet. We just met with the mediator to go over how the process would be handled. We discussed the fact that we do not have a lot to dispute (no visitation issues, childcare payments, investment property, etc.) It is just a basic nuts and bolts divorce. We have been married for 28 years. Like I said, he makes waaaay more than me. I could be wrong about the 401K contributions. The way she explained it made it sound like the 401K stays as one account (more interest accrued that way) but that 50% of it is deemed as mine through some sort of filing. When I retire 1/2 is mine. Perhaps it is only the future value of today's amount. This would be a good point to bring up for the settlement though.

 

The way I look at it is this: Any money he is making is a direct result of the support that I provided over the years. I am also going to ask for a percentage of any bonuses he gets in the future. He is in a job that gives him bonuses because I supported him to make that happen. Now, maybe I won't get that, but that is what I will be asking for.

 

He does have an insurance policy that will have to be maintained.

 

As far as my sister -- I know no one knows what the future will bring (hence my being divorced after 28 years!) but we have always been very, very close. She is relying on me for certain things also. She is a homemaker and has no source of income. I am making money and have the ability to save. I am planning on saving as much as I can to buy us a condo in a few years. She will benefit from that.

 

It's not really a simple nuts and bolts divorce because your future...and his...are financially intertwined between 401K, insurance, alimony, and if you are successful, his future bonus money.  Add in the credit card debt, student loans, and the unsold house...and it's pretty complicated considering there are no minor children involved. 

 

Two things that stand out to me in this post- one is that you think a 401K will earn more interest as one lump sum rather than if you divide it now. Not true. If you make 3% interest on $500,000, that amount is the same as 3% earned on two $250,000 accounts. 

 

Second thing that stands out is that your sister has no source of income. How is she paying her bills? Property tax, her share of utilities, food, etc.?  If she has no source of income you might be expected to chip in a lot more than you currently are. 

Edited July 26, 2016 by Annie G

[Laura Corin]

Does your sister have excellent health insurance? Who would pay if she fell ill?

[TechWife]

I know my financial planning skills need a lot of help :) Once the divorce is finalized I will definitely, without a doubt, be hiring a financial planner. I consider that money will spent.

.

I don't think tou should wait that long, go ahead and start working with a financial planner. That way you will be more prepared for settlement negotiations.

[Home'scool]

It's not really a simple nuts and bolts divorce because your future...and his...are financially intertwined between 401K, insurance, alimony, and if you are successful, his future bonus money.  Add in the credit card debt, student loans, and the unsold house...and it's pretty complicated considering there are no minor children involved. 

 

Two things that stand out to me in this post- one is that you think a 401K will earn more interest as one lump sum rather than if you divide it now. Not true. If you make 3% interest on $500,000, that amount is the same as 3% earned on two $250,000 accounts. 

 

Second thing that stands out is that your sister has no source of income. How is she paying her bills? Property tax, her share of utilities, food, etc.?  If she has no source of income you might be expected to chip in a lot more than you currently are. 

 

My sister is currently living with her husband. I live in an in-law apartment in their house. They have also been married for about 28 years but they are together in name only. They will also be divorcing in a number of years once all their kids are settled. She will be getting half the value of the house etc. etc. She and I plan on combining our stuff to live together in our retirement years.

 

It's hard to get all the details out without making the posts so long and convoluted, but that's pretty much the whole picture right now.

[mommyoffive]

Right now the 401K is at 500K. When I turn 65 in 15 years I will get half of whatever the balance is at that point. He will continue to contribute for the next 15 years and then I will get half of the value at that time.

 

He makes waaaay more than me. And the only reason he makes so much is because I supported him by moving multiple times through our marriage and sacrificing whatever it took so that he could forward his career. He knows that.

 

Gotcha.

 

I don't know anything about divorce so I was just trying to clarify things.  

 

That is so up in the air in my mind.  Is he required to contribute a certain amount?   Are you in charge of his investments in there? 

 

 

Yes the medical would be a line item for me too.  Although I never include it in mine since I am always using after tax, retirement, and medical money.

 

You are going to stay on his medical forever?  With him footing the bill?

[Alessandra]

It's not really a simple nuts and bolts divorce because your future...and his...are financially intertwined between 401K, insurance, alimony, and if you are successful, his future bonus money. Add in the credit card debt, student loans, and the unsold house...and it's pretty complicated considering there are no minor children involved.

 

Two things that stand out to me in this post- one is that you think a 401K will earn more interest as one lump sum rather than if you divide it now. Not true. If you make 3% interest on $500,000, that amount is the same as 3% earned on two $250,000 accounts.

 

Second thing that stands out is that your sister has no source of income. How is she paying her bills? Property tax, her share of utilities, food, etc.? If she has no source of income you might be expected to chip in a lot more than you currently are.

This. Not a simple divorce. I am wondering what the purpose of the mediation -- as opposed to attorney negotiation -- might be. Actually, I am wondering in a suspicious way, not a nice way. I am hoping that you will be able to ensure a good financial future for yourself.

 

For example, if your dh knows that you are planning to live with your sister, that could be used against you. An attorney would ask for $$ for your own housing or ask that you get the house.

 

The fact that you are not great at budgeting does NOT mean that you should be treated unfairly. You deserve to have a decent settlement.

 

So the reason for keeping the 401k in one account may not be something to your advantage. It is really a plus to get as much as possible in your name, under your control. How the house is sold matters too.

Edited July 26, 2016 by Alessandra

[Acadie]

Could you see your lawyer or a financial planner well versed in divorce laws in your state to figure out what loopholes there may be here and what you should be pushing for and watching out for? Questions pps have asked are so important--is your STBX legally required to keep contributing to the 401K at a certain rate, or is this just a good faith agreement? Could he decrease or stop his contributions, and fund his own retirement through non-retirement investments? What if he switches jobs, goes on disability, retires early? Personal health insurance can be an enormous expense. I don't know anyone who was able to stay on an ex's employee plan for very long after a divorce.

 

There are very predictable financial dilemmas that you really need professional advice to anticipate, and it varies a great deal by state. Call in multiple professionals now, not after you receive or agree to a settlement. With his history of deception and betrayal, I think mediation only makes sense if you have professionals who can tell you exactly what's at stake in various scenarios.

 

Amy

Edited July 26, 2016 by Acadie

[Guest]

You should get someone knowledgeable to look at the septic and quote repairs and new, especially if it isnt up to current code.

 

Both you and sis should agree on whether this is the home you want to retire in an d what the ownership agreement will be . You wil not want to have the day come when its sold underneath you for back taxes, or because one of the children inherited, or the ex took out a loan against it and did t pay back, or because you both cant afford the upkeep.

[Arcadia]

However, she didn't get any future value of his career earnings, despite her support of his career up to that point. When my father died, his entire assets went to his second wife.

It happens. Also people do contest divorce settlements after remarrying. The ex-husband may be a nice guy but the 2nd wife may not be that generous or may just need more. It gets ugly.

My uncle remarry in his late 50s and have a child close to 60s. His 2nd wife and baby (now young boy) need more cash towards emergency for when he stop work (not stable job). His first wife is financially secure in her own job and their child is already a college grad so his ex-wife don't mind him reducing alimony.

 

ETA:

Hubby's workplace has divorce drama.

Edited July 26, 2016 by Arcadia

[idnib]

I don't feel that way -- I feel panicky. I have no idea what the future looks like .... I have no idea what a good amount to retire is. I feel like I only have 15 years to get this all together before I retire. I don't want to work when I am 75.

 

My role model was my mother and, like I said, she had plenty of money and ended up bankrupt. She did spend like a drunken sailor, and my stepfather managed to spend like a sailor on crack!

 

I am very happy to have a simple life, a small, safe place, and enough money to finally feel, for once in my life, like I am sheltered against whatever life throws at me.

 

Don't panic!  :grouphug:

 

A lot depends on your lifestyle and cost of living so there's no one number for everyone.

 

If you have a somewhat complex situation, the most detailed and flexible retirement planner I have found is The Ultimate Retirement Planner. My own preference is Firecalc, but most people seem to prefer the straightforward kind. If you check out Fireclac, the interface isn't that great, and the tabs at the top are very important if you're not retired yet.

 

The URP might be a good thing to fill out and take with you to a professional.

Edited July 26, 2016 by idnib

[bettyandbob]

I don't think the OP can make a budget that includes all she thinks she is getting until she has the final settlement.

 

Here are the problems:

 

Forever alimony (most courts just don't do this anymore, it doesn't matter how much you helped his career)

 

Being on his insurance

 

Getting continued retirement/401K contributions

 

Yes, OP may have made a huge difference in xh's career, but courts are now expecting spouses to begin to get on their feet on their own, even marriages that have lasted 20+ years.

 

I'd start by finding out what spousal support minimums are in the jurisdiction. I'd base my initial budget on that. It's going to be bare bones. I'd learn to live on that (sack lunches and no pedicures). I would not plan on retiring at 65. I'd push that to 70.

 

I'd fight for more, but I would not budget on more until I had the settlement.

[Zinnia]

Right now the 401K is at 500K. When I turn 65 in 15 years I will get half of whatever the balance is at that point. He will continue to contribute for the next 15 years and then I will get half of the value at that time.

 

He makes waaaay more than me. And the only reason he makes so much is because I supported him by moving multiple times through our marriage and sacrificing whatever it took so that he could forward his career. He knows that.

 

I wouldn't count on this.  In fact, I would probably ask for half of his 401K to be moved to an IRA in your name upon the divorce.  

 

Lots of things can happen, and even friendly divorces don't always stay that way.  I think that it could be very likely that he will stop contributing to a 401K and figure out places to put money that will allow him to keep it all.  Worst case--he tanks the money just to be petty.  People don't always make great choices, even for themselves, when they are hurting.

 

I'm hopeful that the worst case doesn't come true.  But I think that you should get legal and financial counsel for what to do if it does.

[Garga]

I'm not sure how an ex-wife can be on his insurance. I worked for a health insurance company. Granted, it was a looooong time ago, but ex-spouses were never allowed on the plan.

 

It was spouse and children only. No grandkids. No ex's. It's just not how it works. The insurance company doesn't allow it. Unless things have changed.

 

I don't want to be a Debbie Downer, but I'd be wary about all the promises if I were you. The first order of business is to go to professional money people and the lawyer.

 

Unfortunately, you're going to have to get a job that can support you fully. A job that allows you to pay your own bills. You just never know what will happen in the future. If he marries someone else, then that someone else will be contesting all this. You never know if you or your sister will fall in love with someone else and want to get married and live alone together. Right now you both may have sworn off men forever, but sometimes love hits and it hits hard and things change. You can't depend on her for money a decade or two decades from now. People change.

 

Read those books/websites people have suggested about how to save money. You're going to need to do a 180 on how you've spend money in the past.

 

I'm being doom and gloom, but not to be mean. Just to be sure you're prepared for the future.

[JustEm]

I would certainly require that the 401K contributions be transferred directly to you now and not upon retirement. You have no idea what will happen in that time. Stock market could tank, he could take money out of it in an emergency, etc. It is easier to deal with getting it in your name now than worrying about any possible issue that could arise leaving it unavailable to you later when you need it.

 

Also I'd drop the mediator and have my lawyer directly dealing with his lawyer