If you’re married, the odds are that you and your spouse have been planning for retirement together. Maybe you have joint savings accounts or investment portfolios. Maybe you’ve had conversations about when you’re going to retire and what you want life to look like afterward.
One thing that can throw all these plans into disarray is if the two of you decide to get divorced. It’s very important to consider your upcoming retirement when going through property division. Divorce can have a major impact, but there are ways to preserve the retirement benefits you need.
Splitting up pension plans
For example, perhaps the main fund you planned to use for your own retirement was a pension that your spouse was earning. When your spouse tells you that they want to get divorced, your first thought may be that you’re now going to lose the pension and won’t be able to retire.
But this may not actually be the case. Often, retirement benefits earned during a marriage count as marital assets. It is your spouse who is earning the pension, but you may still have a right to a portion of that payment.
To secure it, you can use a Qualified Domestic Relations Order (QDRO). This is a court order handed out during a divorce that specifies how much of the pension should go to your spouse and how much should go to you. In the future, when your ex retires, they’re obligated to share the retirement benefits with you—even though your marriage has ended.
Sorting through these types of complex issues takes a lot of time and energy during a divorce, but it’s very important. Carefully consider all of the legal options at your disposal.