Divorce is messy. It takes a toll on you emotionally whether you want the divorce or not. However, your emotions are not the only things impacted by divorce.
Divorce can affect your finances well into your future, especially your retirement plans. These are strategies you should consider to protect your retirement accounts.
Do the math
Texas is a community property state, so every marital asset receives equal division between you and your spouse. Therefore, you need to know how much you contributed to your retirement before you got married. You should also calculate both the amount you and your spouse contributed to your accounts during your marriage. These contributions may cancel each other out.
Learn about your plan
Some pensions have annuity-type distributions, while others have one-time payments. In addition, some allow for a joint payout, which could allow you and your former spouse to receive payments after you retire. You may also have a plan that has survivor benefits. You can use this information to negotiate your asset division.
Negotiate
You can also choose to negotiate so you can keep your retirement account intact. Consider what other assets you would willingly give up to keep your pension. You may take on more of the marital debt or give up an asset. You may also purchase a life insurance plan that lists your former spouse as the beneficiary. The key is to find something that matches the value you calculated in the first step. You could even offer to give up some of your separate property, such as a vehicle, artwork or other asset.
Much of what you can do to protect your retirement depends on your state, but if you and your former spouse can come to a fair agreement, the judge accept the negotiation.
