You may have started saving for retirement before you even got married, and then you combined those savings with your spouse’s. The two of you may have planned to travel together or move to a specific retirement community later in life. Your retirement plans involved shared resources and the retention of your marital assets.
However, as retirement has drawn closer, you have become more uncomfortable with the idea of sharing it with your spouse. If you file for divorce now that you are close to retirement, what will that do to your plans?
You may have to adjust your expectations
Unless you have a marital agreement addressing your retirement account, whatever you contributed to your 401k or a pension during the marriage is subject to division. Non-working spouses can lay claim to benefits earned by their wage-earning spouse, as those contributions are part of their shared, marital estate.
Dependent spouses may be able to supplement what retirement benefits they receive in the divorce by making a claim against their ex’s Social Security retirement benefits. What you claim will not impact what the wage-earning spouse receives when they reach retirement age. Although handling the process appropriately will allow you to avoid penalties and taxes when you split your retirement savings, you will likely have less than you anticipated.
For some people, a combination of shared retirement savings and Social Security retirement benefits will help them obtain roughly the standard of living they expected during retirement. Others may need to adjust their travel plans or continue working part-time for longer than they previously planned. For many, those adjustments are worthwhile to have the freedom and peace that comes from ending an unhappy marriage.
Learning more about asset division during a divorce can help you plan for your retirement after one.