Sadly, my spouse and I are going our separate ways. We are in our 40s and thus many years from retirement. As part of the separation/divorce, my spouse will use a large chunk of her share of our retirement accounts to buy out my equity in our house. For simplicity purposes, let's say we have $500,000 in house equity and $500,000 in retirement accounts (in a TSP target-date retirement account, for what it's worth). So if we separated today it'd be a nice easy trade--her $250,00 of stocks for my $250,000 share in house.
The issue that occurred to me today is that it's going to take a couple months for the lawyers to iron out all the details (it's am amicable separation, but these things still take time). If over the next 2 months the market happens to appreciably drop, that could make things more challenging since my spouse could no longer buy me out of the house without diverting money from elsewhere.
The conventional wisdom is to not have in the market money you'll need in the next year (or 2, or 5...). Should that principle apply to my situation? Should I sell all the equities in our retirement accounts today and put it in a safe investment (e.g., Government G Fund)? Then once the divorce is done I just buy back into the target-date fund. I plan to ask my attorney, but figured I'd ask the Boggle brain trust too!
Thanks.
The issue that occurred to me today is that it's going to take a couple months for the lawyers to iron out all the details (it's am amicable separation, but these things still take time). If over the next 2 months the market happens to appreciably drop, that could make things more challenging since my spouse could no longer buy me out of the house without diverting money from elsewhere.
The conventional wisdom is to not have in the market money you'll need in the next year (or 2, or 5...). Should that principle apply to my situation? Should I sell all the equities in our retirement accounts today and put it in a safe investment (e.g., Government G Fund)? Then once the divorce is done I just buy back into the target-date fund. I plan to ask my attorney, but figured I'd ask the Boggle brain trust too!
Thanks.
Statistics: Posted by Messner8000 — Mon Jul 29, 2024 6:42 pm — Replies 5 — Views 941