Divorce, the unfortunate decision to part ways with your spouse, might give one jitters on account of feelings of financial isolation, insecurity and dependence. However, you stand a rightful chance to avail every single financial benefit such as the retirement funds, including pensions, insurance covers, joint savings accounts, and other modes of capital gains. Listed below are 4 Facts You need to Know About pensions and divorce.
- First and foremost, don’t forget you have a share in the retirement funds earned by your spouse during your marriage. Regardless of whose salary contributed to the funds set aside for use after retirement, you have a stake in the marital property, since it was meant for collective use. For e.g. the funds that accumulated in the form of pension based on how long you served in a particular company, 401K contributions that were cut from your salary while you were paid a lesser amount in hand, and earnings from interest & dividends received on joint savings and other capital gains. Familiarise yourself with the laws governing such divisions in your territory to avoid a situation where your spouse is not willing to part with the money and tries to give you a lower amount than what you are entitled to.
- Completing the documents-related formalities timely is crucial. Immediately after you decide to go for divorce, seek the required documents from your spouse’s company benefits office, and not after your spouse retires. As an entitled beneficiary, you may want to take the help of your attorney in acquiring these documents.
- Know the QDRO and act in sync with your rights. Instead of presuming that your share of funds would come to you without a pro-active, involved effort. Acquire a special court order called Qualified Domestic Relations Order (QDRO) and then submit it to the pension administrator for him to be guided by the QDRO on the splitting of the pension funds. Some flagship or military plans have separate rules listed for this transaction.
- Try out all the possible ways. Make sure you also brush up on other retirement assets such as return on investment in social security schemes. Participate actively in all the procedures and secure your financial future without any inhibition.
Following the meticulous route to understand the 4 Facts You need to Know About pensions and divorce can help you in securing your retirement years without depending on somebody else. This way you can totally reap the benefits of your entitlements and never worry about your financial security when you need it the most. You may need help of a financial analyst if you find the complex details and terminology confusing.