Pennsylvania residents who get divorced will also have to worry about the division of retirement plans and the potential financial burdens that go hand-in-hand with that. This becomes more disruptive the older a divorcing couple is, though it can naturally affect anyone’s retirement plans at any age.
U.S. News states that marriage and divorce can have a huge financial impact on all aspects of retirement. It can affect retirement balances, pensions, and Social Security benefits. In some situations, IRA balances or 401(k) plans can be given to one spouse entirely. However, it’s also common to divvy the funds up between both. Dividing by percentage is considered a better idea than dividing by dollar since the value of the retirement plans may change with time. It’s also possible that only the money made after a marriage begins will be available for division between both parties.
Next Avenue states that retirement can be delayed in some cases if a person doesn’t plan their divorce out well enough. It’s suggested that divorcing people take a careful look at the potential taxes on retirement funds. It’s important to examine things that might require someone to dip into their savings, or to rethink making poor decisions regarding which financial assets a person wants to keep and which they want to give to their spouse.
Together, careful examination of funds and critical planning can allow a person to determine what’s best for their retirement after getting a divorce. However, it may also be a good idea to prepare for the financial setbacks that may occur because of it.
For more information, contact Louis Wm. Martini, attorney at law.