How will divorce impact retirement savings?

On Behalf of | Apr 10, 2021 | Divorce

Money is one of the most common concerns for two individuals who have made the decision to end their marriage. Divorce requires a Virginia couple to divide all of their marital property, including their long-term savings. What happens to retirement savings is one of the most pressing and important issues for any couple, especially if one or both parties is nearing retirement age. 

What happens next 

The way retirement savings are divided in a divorce depends on the type of account in question and what the divorce decree says. For many types of retirement accounts, a Qualified Domestic Relations Order is required to distribute funds as determined by the terms of the divorce order. While it is beneficial to have a QDRO prepared as soon as possible after divorce, it is possible to take this step as many as 14 years after the process is final. 

Moving quickly with a QDRO is also beneficial because it alerts the companies holding the retirement accounts to the division of assets in the accounts. The terms of retirement plans can change over time. Unnecessary delay in moving forward with QDRO may cause additional complications. 

A fair division of assets 

One of the most important aspects of any divorce is a fair division of retirement assets. It’s critical to pursue reasonable terms that will make sense long-term. This is one of the many reasons why a Virginia spouse will find it helpful to work with an experienced attorney in pursuit of a final financial settlement that allows for stability and security for years to come.