You’ve worked hard to get yourself prepared for retirement. Now, you find out that your marriage is ending. You might have some concerns about what is going to happen to your retirement nest egg. This isn’t always something pleasant to think about, but you should do just this sooner rather than later.
When baby boomers were asked about retirement and divorce, 23 percent of respondents noted that they will have to work longer because of the divorce. Around 24 percent said that they would be worse off because of the divorce.
There are two reasons why your divorce might impact your retirement, no matter how old you are when you divorce. One of these is that you will go down to one income and might not be able to save like you once did. The other is that your retirement savings might be split between you and your ex.
In Texas, your retirement savings is treated as community property, so it doesn’t matter who put the money into the account or whose name is on it. This would apply to your retirement and your ex’s retirement.
The only way that you might get out of having to fork over half of your retirement savings is to have a prenuptial agreement in place. This is an important step here because you just can’t guarantee that any marriage will last forever. A little bit of discomfort in having to raise the question of a prenup before marriage is worth it when you think about the hassle that it will save you if you do divorce.
If you are facing a divorce and the loss of half of your retirement savings, you need to take steps to formulate a new plan to get your retirement back on track.
Source: Madison.com, “Can Divorce Destroy Your Retirement?,” Wendy Connick, Oct. 13, 2017