You’ve spent years contributing to your retirement account, setting aside money for the life you pictured sharing with your spouse after retirement. However, things haven’t worked out as you imagined. Your marriage has come to an end, and you’re now wondering what will happen to your retirement savings.
Retirement savings are often among the most significant assets in a marriage, and it helps to understand how the law works. It can help you make informed decisions while protecting your interests in a divorce.
What portion of your retirement savings is marital property?
Your spouse may be entitled to a share of your retirement accounts, even if they’re in your name. However, this only applies to the portion earned during the marriage. Whatever you had saved before the marriage remains separate property and is yours to keep.
The portion of your retirement accounts that’s up for division is divided just like other marital assets – equitably. This means the court considers what it sees as fair to both parties, which may not necessarily be equal.
Negotiations may help you keep your retirement accounts
If you want to keep most or all of your retirement savings untouched, you may agree with your spouse to exchange their share for other marital assets of equal value. You can, for instance, offer them a larger share of another asset, such as the family home, a joint account or something they value more than the retirement funds.
Such trade-offs aren’t uncommon, especially if both sides are willing to compromise. That said, ensure that whatever you agree to is fair and sustainable to avoid short-changing yourself.
If you’re facing divorce and have such concerns or questions, don’t wait to get answers. Having qualified legal guidance early in the process can help you move forward with confidence. Remember, the outcome of your divorce can impact your financial future for years to come, and knowing your rights and options puts you in a stronger position.