Parting ways from a long-time spouse isn’t an easy process. After sharing such a large amount of your life together, ending your marriage can be hard. And that’s before you even get to dividing the assets you’ve been building all these years.
People over the age of 50 are looking at doubled divorce rates since 1990. And these long marriages often mean intricately intertwined finances. When it comes time to split them apart, it usually means a portion of your retirement savings will peel off in the agreement.
Longer marriages and lop-sided earnings are often a recipe for ongoing maintenance after divorce, and it could fall on your shoulders to make sure your spouse doesn’t go destitute after you part ways. Even if the courts don’t view a large portion of your retirement plans as shared property, you could still lose a chunk to support.
Once the court makes a determination, you may have to go about submitting qualified domestic relations orders (QDRO). It will outline to those that facilitate your various accounts on how to handle payouts. Your pension or 401(k) may spread between the two of you in a number of ways:
- Transferring funds into another account
- Creating a second account for your spouse
- Maintaining one account with secondary payments
Understanding what could happen to your nest egg is crucial in the divorce process. Know what to expect when you throw everything on the chopping block, and you may be in a better position to develop a plan to move forward.