People are often concerned about their retirement assets when getting a divorce. If you’re close to retirement age and you suddenly have to split everything you own with your spouse, you may be concerned that you won’t have enough to retire. In other cases, people are worried that their spouse controls retirement accounts, like a pension, and that getting divorced will make retirement impossible.
Rest assured that retirement is still possible after divorce, and there are ways to keep these assets. Let’s look at a few things that you need to know about the situation.
Using a QDRO
First of all, you don’t want to split up the assets that you have without using a qualified domestic relations order. This is a legally-binding order that sends a portion of a person’s retirement account to another qualified payee. In other words, if your spouse starts getting their pension in five years, they have to send you the portion allotted in the QDRO, even though you got divorced prior to their retirement.
Consider pre-divorce and post-divorce finances
When you’re getting ready for divorce, you need to make sure that you know everything possible about your financial status. What accounts do you have? How much is saved? What are your retirement goals? You can then use all of this to create a post-divorce budget that is going to fit your needs. This allows you to obtain the assets that you need during property division.
Focus on the goal
Divorce can be complicated, but you need to keep your goal of retirement in view at all times. The decisions that you make should largely be designed to help you retire comfortably and preserve your quality of life.
Talk to your life advisors
When things feel complicated and overwhelming, you certainly want to avoid key mistakes. That’s why it can be so helpful to talk to life advisors like a CPA or a lawyer, who can tell you more about the options that you have and the steps you’ll need to take.