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35 Mason Street, 3rd Floor, Greenwich CT 06830

Greenwich Office:203-622-4455

Law Offices of Doug Wells Greenwich Connecticut Law Offices of Doug Wells Greenwich Connecticut

35 Mason Street, 3rd Floor, Greenwich CT 06830

203-622-4455

Competent and Compassionate Representation

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Importance of Retirement Planning During Divorce

Experienced Divorce Attorney in Stamford, CT

Many couples in todays society are younger and still in the workforce. Even though retirement may be a long way off, it is vital to discuss the issue of retirement during divorce negotiations. Divorce settlements will have a long-term financial impact so it is important to consider the financial needs during retirement years now.

While going through a divorce, it is crucial to review a summary of all retirement plans, including 401(k)s, IRAs and pension plans. An important tip is to divide retirement assets by percentage instead of dollar amount because if the market dips after an agreement is made, the value of the retirement assets may decrease.

Retirement assets will most likely become a critical source of income during retirement so devising a retirement plan during divorce is a necessary step to ensure future financial stability.

Issues to Address in Divorce Negotiations

Retirement funds are usually treated as marital property during divorce. Dividing funds in 401(k) plans and IRAs can be complicated and follow various state and federal guidelines. This is one reason why divorce settlement agreements should specifically spell out how retirement assets are to be divided and transferred to alleviate any confusion or error once the divorce is finalized.

Dividing a pension or 401(k) plan will also require a Qualified Domestic Relations Order (QDRO), which allows funds to be withdrawn without penalty and deposited into a separate retirement account. It is important to have a properly prepared QDRO to protect retirement account funds because the divorce settlement may not fully protect rights to retirement money.

To protect financial stability after divorce, the following issues should also be addressed:

  • Insurance: consider health, life, property and disability insurance coverage that protects alimony or child support payments
  • Beneficiary designations: make sure to change beneficiary designations on all accounts
  • Budget: create a budget to maintain lifestyle, pay off debt and increase savings

Retirement planning is essential during divorce negotiations. Dont let your age discourage you from crucial financial planning in your divorce settlement. Contact family law attorney Douglas J. Wells to discuss the ways you can protect your financial future after divorce.

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