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Adjusting Your Retirement Plan Because of DivorceDivorce can throw your retirement plan out of whack, particularly if you have been investing in your retirement benefits for a long time and are closing in on your target retirement age. The value that your retirement benefits have increased during your marriage is included in your division of property, meaning that your spouse may receive part of your benefits. Younger divorcees have time to make up the retirement money that they lose without having to drastically change their retirement plans. Older divorcees must make important decisions about whether they will adjust their retirement plans.

Ways to Adjustment

People often calculate a specific amount of money to regularly contribute to their retirement plan in order to have enough money to retire by a certain age. Divorce can throw off those calculations by draining money from your retirement savings and decreasing the amount of income you have available to contribute towards retirement. You will be individually responsible for more of your living expenses and may have to pay spousal maintenance and/or child support. There are multiple ways that you can adjust your retirement savings plan after divorce, including:

  • Increasing the percentage of each paycheck that goes into your retirement plan
  • Changing the amount of money that you plan to save by the time you retire
  • Deciding to retire at an older age in order to have more time to save for retirement
  • Making more aggressive investments that have a high risk and reward

Protecting Your Retirement Plan

You may not need to make major adjustments to your retirement plan if you can hold onto most of your retirement assets during your divorce. Protecting your retirement benefits requires planning ahead or being flexible during divorce negotiations. If your spouse has a retirement plan of comparable value to yours, you could agree to each keep your own retirement savings. You can give your spouse other valuable properties, such as your marital home, in exchange for you preserving your retirement plan. A prenuptial or postnuptial agreement can state that retirement savings will be defined as nonmarital property.

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Collecting Your Spouse's Social Security After DivorceRetirement benefits are marital assets that can be divided during a divorce. Negotiating the division of these benefits can be contentious because of their high value and the significance they serve later in your life. Obtaining a share of your spouse’s retirement benefits may mean sacrificing other marital properties as equal compensation. However, Social Security benefits work differently than other retirement benefits. You can collect a portion of your former spouse’s Social Security benefits without it affecting the benefits that he or she receives.

How It Works

You can receive as much as half of the value of your former spouse’s Social Security payments, depending on how close you are to the full retirement age. In order to qualify:

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