A challenge of divorcing your spouse in North Carolina is recovering your retirement savings, especially if you are nearing retirement age. Your understanding of how your divorce may impact your retirement may enable you to make careful decisions about your financial future.
Regardless of the circumstances surrounding your divorce, a decision by the courts to split your retirement savings and benefits 50/50 is the most common outcome. As such, begin preparing immediately to identify what steps you can take to boost your savings and adequately prepare for your future.
Using a QDRO
According to Forbes, a QDRO is a document which details a court order for you or your ex to pay the other person retirement benefits. These payments may take on several forms including alimony, child support or rights to marital property. It stands for a Qualified Domestic Relations Order and its implementation guarantees your access to a proportionate amount of all accumulated retirement savings. A QDRO does not cover everything however, so your vigilance in verifying that your retirement plan qualifies, is necessary.
Mandatory attention to detail
Retirement plans including 401k’s, pensions and IRAs each have different restrictions for when and under what circumstances you may withdraw funds. Your research and attention to the details of your plan may prevent you from making costly mistakes if you withdraw money too soon or disperse your plan incorrectly. Because your divorce has already disturbed your retirement planning, there is little room for error. If you would like to learn more about planning for retirement after your divorce, please visit our webpage.