If you’ve made the decision to split from your spouse, you may already be prepared for some significant life changes. However, in addition to a new home and child custody arrangement, you’ll also need to consider how this dissolution of marriage will affect your retirement. Here’s a closer look at how this family law matter can impact your financial standing later in life.

A Guide to Divorce & Retirement Benefits

What Happens to 401(k) & Individual Retirement Accounts?

Two of the most common retirement savings plans are 401(k)s and individual retirement accounts (IRAs). 401(k) accounts are usually set up by employers, while any adult can open an IRA on their own.

If your spouse started putting money into their retirement plan when you were married, you are legally entitled to a portion, as its considered joint property. The only reason you might be barred from these funds is if you signed a prenuptial agreement that made the account your spouse’s personal property.

To protect your share of the 401(k), you’ll need to draw up a Qualified Domestic Relations Order (QDRO) with a family law attorney. This will outline terms for the pension plan that divorce settlements don’t necessarily specify. This ensures that even if your ex remarries, you can still count on some of the funds they were building during your marriage. IRAs can be divided during divorce settlements without the addition of a QDRO.

How Does Divorce Affect Spousal Social Security?

To gain access to a portion of your ex-spouse’s Social Security payout, you will need to have been married for at least 10 years. If you get remarried, you will lose this opportunity altogether. However, your spouse can remarry without affecting your eligibility.

If you qualify for spousal Social Security and wait until the full retirement age, you may be eligible for half of your ex-spouse’s benefits. The payment will not be taken out of your ex’s portion, so they’ll still receive the funds they originally planned for. If you try to claim benefits between 62 and full retirement age, the payout will be reduced depending on how many months they have until they hit full retirement age.

If you still have questions about this aspect of divorce, you can count on the Law Office of Michael Davidson, PLLC. This Lexington, KY, family law attorney will be happy to address all your concerns and ensure that the divorce settlement serves your best interests. With over 30 years of experience, you can trust this lawyer to provide time-tested guidance. Learn more about his family law work online, or call (859) 225-1717 to schedule a consultation.