When couples get a divorce in Mississippi, property division is often at the forefront. This is frequently true with older couples – also referred to as “gray” divorces. Many might think about homes, automobiles, jewelry and other tangible items. For these couples, however, retirement savings and accounts will be critical to the process. These might have even greater value in the long term than other properties. There are steps that couples should take when dealing with this aspect of family law.
Being prepared for life after divorce means understanding what to do with retirement accounts before and during the divorce. A Qualified Domestic Relations Order is crucial when there is a retirement plan that has been sponsored by an employer. People whose spouses have certain retirement plans, like a 401(k), can only receive a payout if there is a QDRO. The way in which it is written must align with the requirements of the account.
Social Security has certain rules for spouses. If the marriage lasted for at least 10 years and the spouse does not re-marry, the person can get benefits based on the other person’s Social Security record. For stay-at-home spouses, this can be imperative. There are parameters to remember, such as retiring at full retirement age, meaning the spouse will get half the benefits. Early retirement will mean getting less. With assets, there should be a detailed list of what is there. Knowing what retirement accounts are available, how it will affect the person with taxes and early withdrawals is wise.
The retirement plan should be updated. Since the goal of any retirement account is to serve the needs of the person who owns it, this is also important when there is a divorce as a person who is no longer married will inevitably have different needs. Divorce makes it necessary to alter one’s lifestyle. If that means people must downsize, cut spending, change their vacation habits or get a job when they otherwise might not have, it must be considered.
After child custody and support issues, property division can be a contentious aspect of a divorce. With the variety of concerns that will arise, understanding family law options is crucial.