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Important issues relating to divorce and retirement assets

On Behalf of | Oct 21, 2015 | Firm News

Everyone wants to have a secure retirement nest egg he or she can rely on during his or her golden years. In the best of Pennsylvania marriages, couples work together to plan their retirement and they talk openly about their taxes and financial planning issues. However, in most scenarios, couples do not communicate so well about these topics — and this can make things even more difficult during divorce.

A recent study published by Fidelity Investments examined 1,051 committed couples who were 25 years of age and up, and had a minimum income of $75,000 and minimum assets of $100,000. According to the study, partners had different knowledge and expectation about their retirement financing. In other words, they were not working as a “team” and they were not on the same page with regard to retirement planning.

In fact, the study revealed that 40 percent of couples did not know exactly how much their spouses earned. Meanwhile, 60 percent did not know what their partners’ Social Security incomes would be during retirement. In addition, about half the couples did not know how much money they needed to save if they wanted to keep their current spending habits and lifestyles during retirement.

Another issue that can develop during divorce proceedings happens if only one spouse handled the retirement planning and retirement accounts. This can make a divorce very difficult for the other spouse who has no idea how many investment accounts there are and/or how what kind of retirement assets are on file. Lack of financial literacy can negatively impact a spouse financially during the divorce process.

By speaking with a qualified divorce attorney and an accountant who specializes in divorce proceedings, Pennsylvania residents can gain a better sense for what their options are during the divorce process. They can also begin to understand what share of their spouses’ retirement assets they are entitled to during the divorce process.

Source: Forbes, “Divorcing Women: How Much Do You Know About Your Husband’s Retirement?,” Jeff Landers, accessed Oct. 21, 2015

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