Kelly Byrnes & Danker, PLLC

Reducing the effect of divorce on retirement

Regardless of how close or far away retirement might be for a Virginia couple, divorce could make a significant dent in their retirement savings. Further complicating matters may be the fact that it can be difficult to set aside emotions during divorce negotiations. However, this will be necessary to ensure future financial security.

Spouses may have IRAs, pension or 401(k) accounts. Whether or not the account was established prior to the marriage, both spouses may be entitled to a portion of the funds. When looking at the value of an IRA, it's important to keep in mind that withdrawals before the age of 59 1/2 are penalized. To divide a pension or 401(k) as part of a divorce settlement, it is necessary to have a document called a qualified domestic relations order. This is not needed for an IRA.

Social Security does not need to be negotiated as part of the divorce agreement. If the marriage has lasted 10 years or longer, a lower-earning spouse might be able to draw benefits on the salary of a higher-earning spouse. Lower-earning spouses have a choice of either drawing benefits on their own earnings or getting half of the benefits based on a spouse's earnings. This does not affect the benefits that the higher-earning spouse receives.

Even in a high-asset divorce, retirement savings often are one of the more significant assets. However, there may be a number of other complex investments that must be divided as part of the divorce. For example, if one person owns a business, the owner might need to buy out the spouse. Real estate investments and valuable art or other types of collections may also present complications as they may need to be appraised and sold. Legal counsel could help a couple with the property division process.

No Comments

Leave a comment
Comment Information
Contact the Firm

Discuss Your Case With A Lawyer

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Kelly Byrnes & Danker, PLLC

Kelly Byrnes & Danker, PLLC

3975 Fair Ridge Drive
Suite 275N
Fairfax, VA 22033

Phone: 703-224-0888
Fax: 703-268-5888
Fairfax Law Office Map

105 Loudoun St, SW
Office #4
Leesburg, VA 20175

Map & Directions