Getting divorced? Don't forget the pension!
What better time than the week after Valentine's Day to devote a week's worth of blog entries to divorce? This is the first in a series of blog entries focusing on issues involving divorce and retirement. Enjoy!
Did you know that, aside from real estate, retirement plans are usually the largest asset in a marriage? Yet, retirement plans are often overlooked during divorce, because a divorce can occur years before retirement. When retirement is so far off in the future, couples may neglect to pay the necessary attention to pensions and retirement savings plans when they decide to split up.
All too often we hear from individuals who remember retirement plans only after their divorces are finalized. As a result, an ex-spouse can lose out on a significant portion of the marital assets. To prevent this from happening to you, we have outlined a few tips that may help if your divorce involves a retirement plan.
Protect your rights: Get representation
If either spouse involved in the divorce has a retirement plan, hire a lawyer! Divorce often takes an emotional toll on all parties involved, so it may help to have an objective third party handle what can be complex discussions. A qualified lawyer, who knows the ins-and-outs of divorce law, particularly as they relate to retirement plans, will protect your interests and can facilitate a smooth division of these assets.
To find a lawyer, use one of the following resources:
▪ The National Pension Lawyers Network, a no-cost referral service that connects workers and retirees with professionals who can help them understand and enforce their pension rights;
▪ LawHelp.org, a web site that helps low and moderate income people find free legal aid programs in their communities, and answers to questions about their legal rights; or
▪ A local bar association, a professional organization in a city or state that will provide referrals to lawyers. FindLaw.com has a helpful list of state and local bar associations.
Tomorrow's blog entry will focus on how to determe whether pensions and retirement plans are marital property.
Read the rest of the blog entries in this series:
Looking for help with your retirement plan?
If you have a problem with your retirement plan, free help may be available from the U.S. Administration on Aging's network of Pension Counseling and Information Projects. Find help now.
We're hearing from people around the country who are worried about cuts to their pensions. These are their stories. Share yours here.
Roadmap to retirement
Let our roadmap to helpful information about retirement plans for private-sector workers put you on the path toward a secure retirement. Get started.
PensionHelp America connects people who need help with their pension, 401(k), and other retirement plans with the pension counseling projects, legal services providers, and government agencies that can help answer their questions. Visit www.pensionhelp.org.
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Retirement USA is a national initiative that is working for a new retirement system that, along with Social Security, will provide universal, secure, and adequate income for future retirees. Visit the website.
Did You Know?
A defined benefit plan is a pension plan, usually funded entirely by employer contributions, that pays benefits according to a formula. The formula is typically based on the participant's wages or salary and length of time spent working for an employer or group of employers. Defined benefit plans are also known as traditional or guaranteed pensions.