Janet and Kevin are in the midst of a divorce. Kevin has a defined benefit pension which will pay him $2,300 per month when he retires. Janet decides that a few thousand dollars is not worth fighting over - besides she would rather get the $12,000 baby-grand piano they recently purchased for their den.
Wrong decision. Janet has made a costly mistake. Why? Because the present value of Kevin's pension is more than $250,000! Instead of taking the piano, she could have exchanged her half of Kevin's pension upfront for $125,000 worth of another asset, leaving Kevin with is pension. Or she could have chosen to wait until Kevin retires to get her part of the marital portion of his benefit. What seemed to have only been a few thousand dollars on the surface, proved to be a costly mistake in the end.
To get a FREE report "Top 10 Money Mistakes in Divorce," go to www.carolannwilson.com.
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