As you get closer to retirement age, you may start considering the financial resources you’ll rely on in retirement. For instance, perhaps your spouse has a high-paying job and has been earning a pension. Once they retire, the two of you could use that pension to cover your bills together, alleviating some of the stress and anxiety you have about your financial future.
However, if you and your spouse are considering divorce, you may wonder if this means you’ll lose access to that pension plan. Does this also mean it will become difficult or impossible for you to retire the way you planned?
A qualified domestic relations order
This can be a complicated situation, but you do have legal options. One of these is to use a qualified domestic relations order (QDRO). This order establishes you both as future payees of the pension plan and sets the percentage of the plan that should be allotted to you.
Remember, however, that this may not mean you are entitled to 50% of your spouse’s pension. The court will consider many different factors, such as your financial assets, other aspects of property division and the length of your marriage.
For example, perhaps your spouse earned 50% of the pension during your marriage and the other 50% before or after. In this case, the court might determine that you’re entitled to 25% of the future pension plan, which is 50% of the amount your spouse earned during your marriage—the portion that qualifies as a marital asset versus a separate asset.
It’s important not to overlook valuable assets during property division, so carefully consider all of the legal steps you’ll need to take.
