If you are going through a divorce now, one of the things that might be on your mind is how you’re going to divide your retirement income. You may not want to divide your retirement at all, or you may be ready to split it in a way that is fair to you and your spouse.
Depending on the circumstances, you may not have to give up your retirement. While Arizona is a community property state, that doesn’t necessarily mean that you have to divide each asset 50-50. Instead, it means that you need to split the same value of your assets between each other.
Protect your retirement in your divorce
Depending on the value of your retirement account, you may not want to divide it in divorce. For example, if you currently have $50,000 in retirement savings and also have three vehicles worth $75,000, you might suggest selling two vehicles to get close to the same amount of profits. Then, you may ask your spouse to take that cash instead of cutting into your actual retirement account. Why? It’s valued the same either way.
On the other hand, you may find it hard to do this if your retirement is your greatest asset and you have no other assets that come close to the value. In that case, you may need to look into getting help with the division of your IRA, Roth IRA, 409A assets or others. Even pension plans can be subject to division, so make sure you get the right help to establish the true value of the asset and the safest way to divide it to benefit you both.
Dividing retirement assets isn’t always necessary, but it could be
Dividing retirement assets when you’re young may feel less frustrating than when you’re older, so if you’re going through a gray divorce or have significant retirement assets, it’s smart to look into options to keep your accounts in your name. Establishing just how much of your account is truly community property will help you save more of your hard-earned money and savings for the future you have in mind.