Divorce Financial Sense LLC

GOODBYE WEP and GPO

On Sunday, January 5, 2025, President Joe Biden signed the Social Security Fairness Act.

The Social Security Fairness Act repeals the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) provisions of Social Security.

The new law removes the Social Security formulas that either reduced or eliminated the benefits of certain government retirees who receive(d) a public pension. This includes, among others, teachers, firefighters, and police officers.

Eligible public employees will also receive a lump sum payment for what they would have received in 2024.

For those of you who are divorced or in the midst of a divorce and receiving a public pension, this may significantly impact your right to not only collect your own Social Security benefits (WEP) but may also impact your ability to potentially be able to collect on your ex-spouse (GPO).

Goodbye to the WEP and the GPO – we’re glad to see you go!

FOUR WORDS

At some point 4 words were spoken: “Will you marry me?”.
Now, 4 more words have been spoken: “I want a divorce”.
Looking ahead and navigating your divorce you will need 4 new words: own, owe, in, out.
From the exhilaration of “will you marry me” to the devastation of “I want a divorce” comes the security of “own, owe, in, out”.

Fall brings a fresh start after the lazy days of summer. Now it’s time to educate yourself and take control of your financial situation.

What do you own: home, condo, vacation property, checking account, savings account, investment/brokerage accounts, car, retirement plans, annuities, pension

What do you owe: mortgage, home equity line, car loan, school loan, credit card debt

What’s coming in: employment income, investment income, alimony, child support, social security, pension

What’s going out: all fixed/necessary expenses such as mortgage, rent, home insurance, car payment, health insurance, food, cell phone; all discretionary expenses such as cable, vacations, eating out

One indisputable fact of divorce is that two households cost more to operate than one, but your combined total income is unchanged. A post-divorce lifestyle may look very different than the one you had while married. Your strength and security will be aided by a firm understanding of your finances. Will your income meet your expenses? What will happen when child support or alimony ends?

Gather statements for all of your assets (what you own) and your liabilities (what you owe). This is your net worth
Track all sources of income (what’s coming in) and track all expenses (what’s going out). This is your cash flow or budget.

Understanding your financial picture will enable you to negotiate a settlement and have a solid foundation for a new life.

DIVORCE AND HOLIDAYS

In the midst of holiday celebrations, I would like to reach out to those of you going through a divorce, as well as those of you spending your first holiday post-divorce. This season of family and tradition can be a sad and difficult time, especially if this is the first holiday without your children.

I urge you to take care of yourselves: eat well, get plenty of sleep, don’t drink too much and remember to exercise. Do reach out to friends, make sure you have plans for the holidays and contingency plans in case the first set falls through. It can help to have a good book on hand, a pod cast to listen to or Netflix movie you’ve been meaning to watch. This may even be the holiday to get away from it all with a mini vacation.

If you are hosting the holiday, you might consider changing some of the family traditions and starting something new that will make the holiday yours – even if it’s only the stuffing recipe!

Most of all, allow yourself time to grieve. Divorce is a loss. Trying to smile bravely, soldier on and sweep it under the rug doesn’t make it go away and doesn’t help you heal. So go ahead and cry – you’re entitled – then eat some turkey, some pumpkin pie and count a blessing…..or two.

I wish you well as we look forward to 2024.

Join me for Money & Divorce: Costly Mistakes You Don't Want to Make. We will cover 8 financial mistakes you can't afford to make in your divorce.

Shawsheen Tech HS in BIllerica, MA Tuesday October 24 from 6:30 to 8:30 https://www.shawsheentech.org/Domain/151

Newton South HS in Newton, MA on Thursday October 26 from 6:30 to 8:30 pm https://registration.xendirect.com/nce/searchResults.cfm?catID=7