Retirement is usually the result of hard work and planning. Even then, things may not necessarily work out as everyone intended. One of the biggest roadblocks to a retirement starting and continuing as intended is the prospect of the end of a marriage.
- How does divorce affect retirement?
The biggest effect is usually to the biggest resource: time. Retirement plans are often made slowly and deliberately, and the money and assets gathered to support retirement take years or decades to amass. People who get divorced younger generally have more time to recover from changes, but older people may need to push their intended retirement back a few years.
- What about retirement locations?
Some people consider retiring to different states because of more favorable tax havens or better climate. If parents divorce and one moves to a different location, however, there may be consequences such as alienation from the family that stays in the old location. If nothing else, there may be more travel in retirement than originally intended.
- What happens to retirement savings?
Most retirement accounts may need to be separated for people in divorce, and early withdrawals can incur tax penalties. A qualified domestic relations order (QDRO) may be required to smooth this process.
- How can I get help with retirement plans after divorce?
People who are looking to protect their assets throughout divorce can consult with an attorney. Legal representation is very important during risky times in which a lot of assets are at stake, and a lawyer can make sure that people do not lose more than they have to in this difficult time.