Like all other assets, your retirement account may be up for grabs during a divorce. However, it is usually permissible to substitute other assets of equal value in place of your retirement and it may be advisable to do so, particularly if you do not have time to build another retirement account.
The experts at the Men’s Legal Center offer the following advice on keeping your retirement account intact during a divorce settlement:
- First, understand how much you actually need to retire. Many people over- or under-estimate their retirement needs, and may, as a result, fail to provide the proper amount of money to support them during these years. A financial consultant is usually the best person to help you determine your retirement needs given projected inflation, whether you own your home outright and other factors. Be sure to seek expert advice on this subject before you make any financial decisions related to your divorce.
- Once you have a retirement “number” in mind, look at the totality of your assets. It is possible to “buy out” your spouse in order to keep your retirement account intact by substituting other property. For example, if your retirement account currently contains $250,000 and you have a paid-for property worth that much, you can sell the property and pay off your spouse. However, it is important to consider all factors, such as how selling a paid-for home will impact your retirement plans. It may be better to get rid of some of your cash and hang on to your home, especially if the property is likely to appreciate over the next ten years.
- Consider your options. Now that you have a better idea of what you will need to do in order to have enough money for your retirement and what assets you have available, you can begin to plan. You should consider your income, your future expenses such as college for your children, and how long you will have to save money for retirement. Making these calculations now will help you determine the best financial decisions during your divorce.
The Men’s Legal Center can help you negotiate the right divorce settlement to protect your interests and your future. Contact us today for a consultation and learn how we can help you survive the divorce process and even thrive after it is over.