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How to protect your retirement in a high-asset divorce

Divorce can be a challenging and emotional process, especially when it involves significant assets, such as retirement funds.

Securing your financial future during a high-asset divorce is important as is safeguarding your retirement.

Documentation is key

In 2022, for every 1,000 married women, 14.56 got divorced. If you fall into this statistic this year and have a high-asset divorce, to protect your retirement assets, begin by gathering all relevant financial documents. This includes statements for your retirement accounts, investment portfolios and any other assets and those of your spouse.

Evaluate retirement accounts

Your accounts may have different tax implications and withdrawal rules. Learn the details of each account, such as 401(k)s, IRAs and pensions. Consider seeking professional financial advice to make informed decisions.

Consider a QDRO

A Qualified Domestic Relations Order is a legal document that outlines the division of your retirement assets during a divorce. Implementing a QDRO can produce a smooth and fair distribution of retirement funds. You also protect yourself from early withdrawal penalties or tax consequences.

Understand social security benefits

If your marriage lasted for 10 years or more, you may have access to a portion of your ex-spouse’s Social Security benefits. Familiarize yourself with the eligibility criteria. Then, claim what is rightfully yours so you can maximize your retirement income.

Seek mediation or financial advisors

Consider alternative dispute resolution methods like mediation to reach a mutually agreeable settlement. Additionally, engaging financial advisors can provide valuable insights and help you make informed decisions about the division of assets, including retirement funds.

During the divorce process, review and update the beneficiary designations on your retirement accounts and life insurance policies.

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