Divorce takes both an emotional and financial toll on you and your former spouse, and the greater your assets, the more difficult your financial challenges. You may find it surprising that even your retirement account funds can be at risk during your divorce.
Therefore, these are a few ways you can protect your retirement during a divorce.
Learn about your pension or retirement account details
When you set up your accounts, you may not have read the fine print. This is a great time to do that. Find out how the payouts work and if they offer survivor’s benefits. For example, does the plan payout with a monthly annuity structure or as a lump sum? Also, can only one or more people receive these payments?
Gather your financial and retirement information
Because Louisiana is a community property state, everything you and your former spouse acquired during your marriage is marital property. Marital property in community property states also gets divided evenly, not equitably. Therefore, every penny you put into your retirement account or earned in interest during your marriage is community property and subject to division.
However, your ex’s retirement account distributions count also, and they can offset your account balance. Therefore, gather your and your former spouse’s financial documents, including retirement distributions.
Remain open to negotiation
Draining a retirement account, even partially, has a lasting impact on your financial future. Therefore, stay open to negotiation. Consider offering other assets, even cash in the bank or your family home, as you divide everything up. Find things that your former spouse values or offer life insurance policies with similar values.
It may take some creativity, but you can protect your retirement during your divorce.
