Divorce – buying out the ex

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This topic contains 1 reply, has 2 voices, and was last updated by  SherrieL 11 months, 2 weeks ago.

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  • #154676
    newhalljo
    Participant

    I’m 59, setting aside the max to 401k and have >$750k in retirement funds. Going through a divorce after 25 yrs with no debt & $12k in emergency fund. Soon-to-be ex wants his half of the equity in our home (~$135k) and isn’t willing to accept his retirement payout/transfer to me in trade (his is much greater than mine). What would be the best way to fund the $135k payout? Borrowing against one of my retirement accounts? Refinancing my home with a bigger mortgage/higher monthly payment will not be financially possible given my salary/net pay.

    #155951
    SherrieL
    Participant

    I would sell the house, hand him half the proceeds, rent or buy something cheap and get out of the entire mess. In many cases, borrowing against the 401K is not going to give you the amount you need, the amount borrowed is probably capped at well less than the 135K you need (aside from other considerations like if you lose your job having to repay the $$ in a lump) At 59. you probably don’t have minor children living in the house, so uprooting them isn’t an issue. Do NOT get into an emotional battle over “it’s MY home dammit!” It is a thing, and things can be replaced. If you cannot afford the arrangement, you may not be able to afford living there, period. Do not allow sentiment for the house to cloud your judgment over what is best for you in your approaching retirement years.

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