One of the most significant aspects of your finances is your retirement savings. Unfortunately, your investment in your future can also become vulnerable during the divorce process. What can you do to protect this savings and support your long-term financial health?
1. Understand your assets.
The first step in protecting your retirement savings is to have a thorough understanding of what they entail. This includes knowing different types of accounts like 401(k)s, IRAs and pensions. Make a detailed list of all your accounts, how much money each one has, how they are funded, any rules about taking money out and any penalties you should consider.
Depending on your financial situation, you may need to work with financial professionals to fully understand the value of your retirement savings. For example, a forensic accountant can help in complex situations by determining the worth of your retirement savings and clarifying what portion of those accounts are jointly-owned.
2. Hire an experienced divorce attorney.
Navigating the legal complexities of divorce can be daunting, especially when it comes to dividing assets like retirement savings. Hiring an experienced divorce attorney can make a significant difference. Your attorney can ensure that you fully understand the value of your retirement assets and fight for you to receive your fair share.
3. Explore all your options before making decisions.
When it comes to dividing retirement savings, you should consider all the options available to you. For example, if you value keeping your savings, you might allow your spouse to keep other assets in exchange for those funds. In other cases, you might prioritize a specific division strategy that aligns with your financial goals. Take time to understand your priorities and use the guidance of your attorney and of experienced financial advisers to determine which option is best for you and your finances.
4. Keep meticulous records
As you go through the process of dividing your retirement assets, it is crucial to keep detailed records of all transactions and agreements. Document everything from account statements and withdrawals to communications with your attorney and financial advisor. These records can serve as evidence in case of disputes.
5. Update your beneficiary information.
Once your marriage ends, remember to update the beneficiary information on all of your retirement accounts. Many people overlook this step, but it is a key way to ensure that what happens to your retirement assets reflects your life after divorce.
Divorce is never easy, but taking these steps can help protect your retirement savings and secure your financial future. Protecting your retirement savings means not just keeping your money safe, but also giving yourself peace of mind for the future.