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Turn Over Your Money and M-16
Millitary personnel want changes to rules on dividing retirement
Posted by Rachel Small on Wed, 10/03/2007 - 1:30pm
A conflict between military personnel and their ex-spouses may be brewing over retirement payments. At the Pentagon's recent briefing on the Uniformed Services Former Spouse Protection Act (USFSPA), there was demand for reform.
USFSPA, enacted in 1982, allows state courts to divide military retirement as property in divorce settlements. For example, ex-spouses married for 20 years or more can be awarded up to 50% of the former spouses pension for life, or until they remarry. If there were child support or alimony court orders, the ex could enjoy as much as 65% of the military pension.
Congress intended to protect former spouses — chiefly women — from being "dumped." It was thought military wives could not easily establish careers and work on their own retirement, since they moved frequently due to thier husband's military career. Times have changed now, and military wives can work and earn pensions.
USFSPA gives state courts authority to distribute retirement pay, classified as both property and income. Spouses often end up with a substantial share of the ex's retirement. This is especially true in the case of short-term marriages.
Some of the proposed reforms include:
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Financial experts suggest that the biggest economic burden from divorce falls on women and children. On average, after a divorce they suffer a 45% reduction in standard of living.
At this time of great emotional pain, making ends meet becomes a daunting task. I've put together a few strategies for money management and living within a budget for all the women out there facing the post-divorce financial crunch.
Changing your lifestyle isn't easy, but if you keep these tips in mind, you can survive post-divorce financial troubles. Don't let yourself and your family become part of the rising debt statistics — manage your money wisely.
Create a Budget:
- List predictable amounts and sources of income. If employed, use your take-home pay.
- Record your monthly recurring expenses: rent/mortgage, utilities, food, medical, insurances, transportation, car payment, credit cards, telephone, cable, internet, education, clothing, charity, gifts, misc.
- For three months, record all of your expenditures — this helps you know where your money is going.
- If you have more expenses than income, adjustments will have to be made.
- The final divorce decree should have allocated debt responsibility. Include your share of payments in the budget.
Trim Expenses:
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