WE ARE AVAILABLE to meet clients and prospective clients by telephone and video conferencing, using either Zoom or Facetime. We are also available in person, whatever works best for you! We will continue to assist you in any way we can. Please do not hesitate to call our office and let us know how we can help.

Fort Myers Family Law Attorneys
Contact Us

What becomes of pensions and Social Security during a divorce?

On Behalf of | Sep 28, 2017 | Property Division |

Each year, some 1.2 million American couples file for divorce. If your retirement is nearing, then you might wonder what will become of your hard-earned pension and Social Security (SS) in all of this.

If you have investment accounts like a 401(k), money market, or Roth IRA, then you’ll want to first assess what value each of those has now. You’ll then want to compare that to what it would have if you were to equitably divide it between you and your ex.

In some cases, you may find that an equitable division of an asset such as this makes is much less advantageous for you that it would appear on the surface. Splitting it this way may result in you being taxed at a different rate or early withdrawal penalties.

One key to avoiding those taxes and fees is by clearly spelling out how it is that you plan to divide up an investment account with your ex when your draft the divorce decree. In the case of a 401(k), it is possible to avoid paying taxes and fees when splitting it up, provided that you do so with a Qualified Domestic Relations Order (QDRO) in place. You even may be able to roll your funds into an IRA account within a year of the divorce.

In the case of SS benefits, a divorcing spouse that is married to the recipient spouse at least 10 years is eligible to petition the Social Security Administration (SSA) to receive his or her former spouse’s benefits.

Before they can start claiming SS payments though, they’ll have to have turned 62 and have been married to the recipient within the prior two years. They’ll be entitled to 100 percent of your SS benefits if you predecease them, although, if they remarry, that can impact their entitlements.

Studies show that the average American couple receives $2,260 monthly in retirement in Social Security alone. Having to give up half of that each month can greatly impact your quality of life as you age.

If you’ve worked hard to build up your retirement account or have paid into the SS system for years, then you may have some hard feelings about simply turning over your funds or benefits to your an ex. A Fort Myers divorce attorney can advise you of available options that may allow you to hold onto more of your assets.

Source: The Motley Fool, “How to protect your retirement savings during divorce,” Sarah Szczypinski, accessed Sep. 28, 2017

Archives

  • The Florida Bar | Board Certified | Marital & Family Law
  • Super Lawyers
Photo of Professionals at Thompson Family Law
FindLaw Network