Retirement is usually a lifelong endeavor; people work for decades, looking forward to the time when they can finally quit their job and pursue a life of travel and hobbies. The prospect of divorce can be especially concerning for adults who are nearing retirement age because it begs a host of difficult questions: How much of my retirement will I lose? What kind of home can I afford to live in on my own? Will I be able to retire at all?
The answers to these questions vary for every divorcing spouse, but rest assured that whatever complications your case may present, having an experienced attorney on your side will result in a better outcome than if you decide to represent yourself.
How Are Retirement Plans Treated in an Illinois Divorce?
In addition to the fact that liquid assets and real estate must be divided, retirement plans must also be included as part of the divisible marital estate (unless they are protected by a prenuptial or postnuptial agreement). However, spouses can divide their entire marital estate however they want – as long as both spouses agree. This means that, while you can divide your retirement accounts, you do not necessarily have to.
That being said, in certain situations retirement accounts will have to be divided. This is very common in relationships involving couples where only one spouse worked and the other spouse stayed at home to raise the children and maintain the home. The most common way to divide retirement accounts like 401(k)s is using a Qualified Domestic Relations Order, or QDRO. These allow retirement account administrators to pay the non-beneficiary spouse directly from the plan, so the spouses do not have to interact with each other to handle payments every month. Other plans have complex paperwork and administrative requirements, so it is important to make sure you follow those guidelines, otherwise funds could be inaccessible.
In contrast, Social Security benefits cannot be divided like retirement accounts can. Instead, each spouse can collect on either their own benefits or their spouse’s benefits, whichever is higher. If you choose to collect on your spouse’s benefits rather than your own, you will never get more than half the amount of their monthly benefit payment. To qualify for spousal benefits, a couple must have been married for at least ten years. Having a spouse collect on your benefits will not diminish your own.
Call a Naperville, IL Divorce Attorney
With careful planning and the help of a skilled legal advocate, retirement after divorce may not be as far as you fear. Call the offices of [[title]] today to schedule a free, confidential consultation with a Lombard, IL divorce attorney to examine your options and start thinking about a strategy for handling your divorce. Contact us today at [[phone]].