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Can you protect retirement assets in divorce?

Getting a divorce can raise some questions about your financial future. This is especially true if you are nearing retirement age. You and your spouse may have been saving for retirement jointly or counting on the same retirement plan. But now you have to divide your marital assets.

For example, perhaps you don’t have a retirement plan yourself at all. Instead, you were just counting on your spouse’s pension plan from their employer. If you get divorced, does that mean you’re going to lose that pension because you won’t be married whenever your former spouse decides to retire?

A qualified domestic relations order

You can divide retirement assets during a divorce, and you can do it by using a qualified domestic relations order (QDRO). This is an enforceable court order. It will confirm a specific percentage of the future pension payments to you.

That doesn’t mean that you necessarily get half of your former spouse’s pension, even if you get 50% of other assets. There are many different factors that the court has to consider, such as when you got married, the duration of that marriage, what assets were earned prior to the marriage – or after the divorce – and much more.

For example, if it took your former spouse 30 years to earn the pension, and the two of you were married for 15 of those years, you may be entitled to 25% of the future payments. This is because your former spouse only earned half of the pension during the marriage, and you are entitled to half of those earnings.

This is just one example and the exact numbers are going to be unique from case to case, so be sure you know what legal steps to take.