Divorce will bring several significant changes to your life, including your finances. You understand you will have to make significant adjustments to your spending and your plans for the future, including your retirement. In fact, many people have concerns that the end of their marriage will mean the end of their hopes for the future.
Simply because you are divorcing does not mean that you will have to give up on your retirement plans. You will, however, have to be intentional about protecting your future interests and pursuing a final order that grants you a fair portion of all marital property. There is a lot at stake, and it can be helpful to put temporary emotions to side and focus on what will truly be best long term.
Fighting for your future
Retirement savings accumulated over the course of your marriage are marital assets, which means they are eligible for division during a divorce. Divorce is already a financially complex and emotionally difficult and dealing with such a valuable asset is not always easy. As you prepare for court or work through negotiations with the other party, it may help to consider the following facts:
- A QDRO is a legal document that allows you to receive payments from certain types of accounts. This is important for distributing assets from specific types of retirement plans.
- If the terms of your property division order give you payments from a 401(k), it may be possible for you to roll over those benefits into another retirement fund without a tax penalty.
- There are few options by which a couple can divide a defined benefits plan, such as a pension. The right option depends on your individual situation.
There are several different types of retirement accounts, and there are specific ways that account assets can be accessed and divided. As you consider your final agreement, it's smart to think about issues such as drafting a QDRO, potential tax penalties and any waiting periods that may apply.
The best future starts now
Even if you are years away from retirement, the choices you make today matter. Through a smart property division settlement, you can secure what you need to look to your future with confidence. With the help and guidance of an experienced California divorce attorney, you can pursue your specific goals for your retirement savings. You have the right to fight for the best possible future, both immediately after divorce and well down the road.