When you are in the process of going through a divorce, you want to be sure that your financial status is put in order to protect you in the future. After all, you don't want any future financial needs to be compromised by your ex-spouse. One area that many people overlook after divorce is their retirement plan. They often forget to exclude their ex-spouse from this plan, which leads to financial problems in the future. Here are four steps you should take to ensure that your retirement is protected:
- Get a Qualified Domestic Relations Order: The Qualified Domestic Relations Order is what needs to be filed in order to determine how your retirement fund is going to be split. This is often needed when your spouse was involved in your retirement plan, which is often the case if your spouse was not working or had their name on some documents in the retirement plan. Since this can be a complicated matter, you will want a divorce attorney by your side to help you with determining how it should be split.
- Change the Beneficiary: Aside from changing the beneficiary on your will, you also need to change it on the retirement accounts since this is separate. This is one of the main reasons people find themselves in financial trouble upon retirement after divorce.
- Dicuss Social Security Benefits: If you have been married for over ten years, then you and your ex-spouse are eligible to receive social security benefits from one another. However, you can only claim one, so it's important to go over the social security benefits with one another to determine which one should be used. If this is something you cannot resolve, you can bring it up in court. Keep in mind that you are no longer eligible for the social security benefits should you remarry, though.
- Change Investments: If you have your retirement funds put into investment accounts, you may want to reprioritize these accounts. This is because you probably have your retirement funds put into higher risk accounts because you had a higher household income when you were living with your spouse, but now that you are divorced, it's only your income. For this reason, it's best to put your retirement funds into lower risk accounts.
When you take these four steps, you can easily protect your financial future upon retirement after going through a divorce. Since your needs are going to change once you are retired now that you are no longer married or you are remarried, this is extremely important for financial security for yourself and others in your family, such as your kids. Talk with an attorney, such as Karen Robins Carnegie PLC, for more help.