A goal you may have had with your spouse was to save for retirement. Unfortunately, your plans may be severely disrupted if you decide to get a divorce after you start putting money away. Here is some essential information you should know about how retirement benefits are handled during divorce proceedings.
Social Security Benefits
Were you aware that you are still entitled to your former partner's social security benefits after a divorce? There are some requirements that you must meet though, which including being 62, having the marriage last for at least 10 years, and not remarrying after the divorce.
The reason you can still receive these benefits are because they are from the government, and not personal assets of your former spouse. A divorce will not cut off the benefits you are receiving due to social security. If you were planning on receiving your spouses social security for retirement, know that it will always be there as long as you still qualify for it.
It's possible for an IRA to be divided between both partners after a divorce. It helps to work with an attorney to divide an IRA, because there are tax implications from simply withdrawing the money. Money removed from an IRA would need to be transferred to a brand new IRA in order to avoid penalties.
For instance, if you are younger than 59 ½, you'll end up paying income tax on money withdrawn from a traditional IRA, plus another 10% due to the penalty. Roth IRAs have slightly different rules since you do pay taxes on the money before it is put into the retirement account.
Personal pensions are another retirement asset that can be contested during a divorce. Splitting a pension requires an official court order, even when both partners have not reached the age of retirement. When the person that has the pension is eligible to start receiving it, a portion of that money will go to the other person. Of course, different states have different rules regarding how pensions are divided, so always work with a lawyer to ensure that it is being done by the books.
If your spouse has much of the retirement funds in their name, and they are not understanding of your situation, you should prepare to fight for your rights to retirement benefits during a divorce. That's why it is so important to have a lawyer by your side during the entire process, to ensure that you get the assets that you deserve.
When my spouse decided to divorce me, I realized that I really needed to work with a professional attorney. I started looking around for great general attorneys who would be willing to take the case, and I was able to find a great team that I felt good about working with. They were intelligent, hard working, and had been in business for years and years. This blog is all about working with an awesome lawyer who can help you to get a fair settlement in court. Check out these blogs for important tips on finding and working with an attorney.