Your Retirement Plan and Divorce
A couple that has been married for decades, has usually accumulated some retirement savings with the idea that they would be together during their retirement years. When faced with divorce, each person in the relationship will have to re-evaluate their future plans and consider the amount and availability of their retirement assets. Here are some considerations regarding your retirement plan and divorce.
In Florida, the law allows the division of marital assets which typically means income and items acquired during the marriage. In some cases, retirement accounts may have been partially funded before the couple married and in others, all of a person’s retirement will have been acquired during the marriage. Florida law allows for an equitable distribution of marital assets during divorce which will include retirement account funds which were contributed during the marriage. To determine how to fairly divide this and other marital assets, the court can look at how long the couple was married, each spouse’s contribution to the marital and non-marital assets, and their respective debts and liabilities.
For many working individuals, their Social Security benefit is a significant part of their retirement plan. For couples who have been married for 10 years or longer, a spouse can be eligible to receive benefits on their former spouse’s record provided they are 62, not married, and they would receive a lesser payment under their own record. In most cases, at full retirement age, a former spouse will be qualified to receive half of their ex-partner’s benefit.
Another possibility during divorce is that one person in the marriage does not have the ability to support themselves. This may be due to a disability or their staying home to raise children or to fund their partner’s educational and professional advancement. After a divorce, it may not be realistic for the person to return to the workforce immediately or at all. In that instance, it may be deemed appropriate for the other party to pay alimony on a temporary or even permanent basis for their former partner’s living expenses. For the obligated party, alimony may be an expense which substantially affects their financial ability to retire as they planned prior to the divorce.
What Happens Next?
A formerly married couple who had been planning to retire together can be faced with having considerably fewer resources for their individual retirements following divorce. Further, each person will now have to shoulder household expenses on their own. The change in their proposed retirement income and living circumstances may require that one or both work longer than anticipated.
At the Draper Law Firm, we have experience helping people going through a divorce and understand the unique challenges which can be presented concerning retirement accounts and future plans. We have the experience and knowledge you need to protect your retirement interest during and after divorce. Please contact us to schedule a free consultation. We invite you to learn more about our firm here.