If you have to get a divorce, you know that your retirement could be at risk. Will a divorce derail your retirement plans? It is possible.
Keep in mind that divorce does usually have a substantial impact on your retirement plans. Of course, it doesn’t only affect your retirement. If your spouse has a retirement plan, then your spouse’s plan could be affected as well.
If you are closer to retirement, then you are more likely to be affected by your divorce than if you are not going to retire for a long period of time. That’s because you have spent more time together building the retirement funds and may both have had the goal of retiring with them in mind.
You can protect your retirement assets during the division of your assets if you are careful. Remember that any retirement assets you accrued before marriage will remain separate property. It is only the retirement funds that you have gained during your marriage that can be divided as marital property.
Deciding to get a divorce could mean that you have to work longer to build your retirement back up, especially if you must share your retirement with your ex-spouse. You also have the possibility of negotiating so that you can keep your retirement or pension separate from what your spouse takes away from the divorce. For instance, if your spouse wants your home, you may be able to negotiate that your spouse receives the home while you keep your retirement.
When you negotiate your divorce settlement, keep these ideas in mind. If you are worried about protecting your assets, your attorney can help.
Source: Forbes, “Does Divorce Derail Retirement?,” Larry Light, July 24, 2017