Watching the impact of your divorce on your future can feel disheartening. Even with the freedom from your marital woes, having to rebuild so many aspects of your life may seem daunting at first.
Your retirement plan is one area that may feel the impact of your changing relationship. Most likely, the courts will require that you split your retirement benefits.
Identifying ownership
Depending on the type of retirement accounts you have, the assets in them could belong to only you, only your ex or a combination of the two of you. As a general rule, contributions made prior to your marriage belong to you while contributions made after your marriage belong to both you and your ex. The courts classify these different assets as separate or community property.
You may have a variety of retirement accounts in your name including personal 401k plans and employer-sponsored benefits. As such, the separation of retirement accounts could take some time. You may need to sign a qualified domestic relations order or QDRO. This document describes how the division of mutual retirement benefits will work once you and your ex reach retirement age.
Planning the future
Despite the uncertainties of your current situation, you can begin rebuilding your plan right away through proactive planning. According to Reuters, strategic saving and a bit of time can make a considerable difference in your ability to get your retirement plan back on track.
Once you receive your settlement, see what your options are for rolling your portion of the benefits into a personal retirement account. Even if a small amount at first, contribute consistently to your retirement plan. Your divorce cannot take away your control of the future or your success.