When you find that you and your spouse need to get a divorce, there are so many moving parts. One that is often overlooked is how your divorce will affect your retirement.
The closer you are to retirement, the more front and center this becomes when divorcing. Divorce in this age group is often referred to as a gray divorce.
During a collaborative divorce, couples meet with a neutral financial professional who can help untangle a complicated financial landscape and determine how the financials, including retirement, can be distributed in a mutually agreeable way without court and litigation.
Here are some thoughts to keep in mind when it comes to divorce affecting your retirement:
- Know your retirement account balances for you and your spouse – 401K, IRAs, CDs, and social security benefits
- Understand the tax effects of your retirement accounts
- Learn how your pension income streams will be affected
- Retirement funds are often considered a shared asset
- If you had your retirement account before your marriage and/or made contributions after you separate, how will it be divided?
- Determine what happens if you or your ex remarries, will they continue to receive your retirement
- Develop a plan now to reach your retirement goals after your divorce has been finalized, don’t wait until everything has been agreed upon
- Consider opening a new post-separation retirement account
Getting a divorce is challenging in so many ways, and often people think with their heart and not their mind, which can have a lasting impact on how you will live financially after retirement. So be proactive, think towards the future, consider all options, especially working with a neutral financial professional who can help you understand your retirement accounts and options for deposits after separation.
A Better DivorceTM is an interdisciplinary group of professionals who are committed to non-court, non-confrontational solutions for family law matters.
Note: This information is general in nature and should not be construed as legal/financial/tax/or mental health advice. You should work with your attorney, financial, mental health or tax professional to determine what will work best for your situation.