Divorce brings many changes, particularly to finances. And as many Arizona residents have discovered, one of the financial aspects that can be significantly affected by divorce is retirement. While divorce often means having to restructure retirement plans, the process can be completed while still protecting some of the benefits each person receives.
There are cases where couples can agree to amicable and easy property division regarding retirement. For example, if both spouses had similar amounts in their retirement account, each person can keep their benefits for themselves. However, when spouses have a significant difference in the amounts in their retirement accounts, the spouse with the lower amount might be able to negotiate for some of those benefits. This is done through a qualified domestic relations order or QDRO, which allows a spouse to transfer retirement benefit savings to their ex. The savings that can be transferred, however, are those acquired during the marriage, not before.
Another way to access an ex’s retirement benefits is through social security. People who have been married for at least ten years prior to their divorce can have access to half of the benefit their ex-spouse can receive if their own benefit is lower than what they would receive through their spouse, they have not remarried and if their spouse has reached retirement age.
Once the divorce is final, it might be time to restructure the retirement plan. This means using the information about their newly single expenses, their planned retirement age and expected life expectancy as well as their predictions towards budgeting to plan how to proceed when it comes to retirement.
During the divorce process consulting a lawyer about family law and legislation regarding divorce might be helpful in negotiations and planning. A lawyer can also represent their client in court and with conversations with their ex-spouse.