Divorce and Retirement Planning
If you are married, there are plenty of statistics to suggest that you won't stay that way forever. On May 21, 2001, for example, the National Center for Health Statistics and the Centers for Disease Control and Prevention released data indicating that 43 percent of first marriages end in separation or divorce within 15 years. If you also add in the number of divorces occurring after the first 15 years of marriage or upon remarriage after a divorce, things can look pretty bleak if you are married and trying to beat the odds.
Given the high incidence of divorce, your retirement planning efforts may have been more successful than your marriage. Either way, divorce is one of a handful of commonly encountered situations that affect retirement planning. If you or your spouse have been fortunate enough to accrue pension rights or other retirement savings, the disposition of these benefits will be of great concern to you when you work out your property settlement. In the vast majority of states, your retirement benefits are considered an economic resource that is subject to some form of apportionment between you and your spouse.
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Warning
The valuation and apportionment of retirement benefits between divorcing spouses is an extremely complex area. Generally, the advice and guidance of an accountant or actuary, in conjunction with a divorce attorney, is useful in resolving the matter.
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The following material concentrates on the requirements that must be met to effectively transfer an interest in an employer-sponsored qualified retirement plan during a divorce. A brief overview of the factors to be considered in fashioning a division is also included.
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