Millennials are facing divorce differently. In an age where divorce has become less stigmatized, many young couples are coming to terms with the end of marriage earlier. Couples in their 20s and 30s are choosing to divorce differently than the generations before them. Many millennials grew up in divorced families themselves. They have witnessed the messy side of divorce and are cautious to the effects of a bad separation.
Young couples are increasingly practical about divorce
Mediation has become a popular option for young separating couples. It is also a great option because most people in their 20s and 30s have had less time to acquire assets. Mediation offers a less stressful and less expensive option for the divorce process.
More millennials are familiar with divorce and therefore choose to enter marriage with a prenuptial agreement. Prenuptial agreements are a smart choice, even if you do not have a lot of assets right away. They can protect assets down the line, including intellectual property. Many young people do not know that intellectual property can be considered martial property.
Even small retirement assets are important
While many millennial divorcees are making more practical choices, many are not thinking long-term during the divorce process. Young people are often less concerned about retirement assets. They make the mistake of thinking that retirement is a few decades away; and therefore they shouldn’t worry about it. Many divorcees in their 20s and 30s will offer to give up the 401(k) or savings account and try to keep the house instead.
In the long-term, giving up retirement assets entirely can be detrimental. While there is more recovery time for a young divorcee, there is no way to replace the foundation of an early retirement savings. Many millennials also neglect to plan for a changed budget after marriage.
Plan for a new life and new budget
Young divorcees often misjudge the lifestyle change that will be required after divorce. Divorcing couples must consider that their current assets will be divided, and they will not have the extra income coming from their spouse each month. Many millennials do not plan for a changed lifestyle, sometimes falling into debt after divorce. This additionally impacts their ability to contribute to retirement savings.
No matter your age during divorce, it is important to keep long-term finances in mind. It can be beneficial to keep your share of retirement assets and plan for a realistic budget after divorce. The post-divorce adjustment period will be much smoother with proper financial planning and the assistance of an experienced attorney.
