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Retirement Benefits - Tips for Divorcing People
Pensions, IRAs, executive compensation benefits, 401(k) accounts, 403(b) accounts, cash balance plans, profit sharing plans, 457 plans, tax sheltered annuities, Roth IRAs, Civilian Thrift Savings accounts, Keogh accounts, nonqualified plans, FERS benefits. Initially, this may seem like a bewildering array of names and numbers, especially for a person already overwhelmed by divorce. But it does not need to be.
Here are some tips for divorcing persons that will help enhance your financial future.
First and most importantly, remember what all of these items have in common. They:
- represent funds available to support a person during his or her retirement or old age;
- are often the most valuable assets of a marriage;
- are frequently over looked when couples are divorcing;
- can, for the most part, be allocated between spouses as part of a divorce.
Second, work with a lawyer who is experienced in dealing with retirement benefits in the context of divorce, a sometimes complex legal issue. You have the right to receive competent professional representation.
Third, educate yourself about the specific retirement accounts that you or your spouse have. For example, are the benefits vested? In what form and when may you receive the benefits? What are the tax effects of dividing the account with your spouse?
Fourth, know your legal rights. For example, a spouse may be entitled to a share of the other spouse's retirement benefits even if the other spouse is not receiving the benefits at the time of the divorce. Your lawyer should be able to explain the law to you in a way you understand.
Fifth, consider working with a financial professional. He or she can value a benefit or help you create an overall secure financial plan. Ask your attorney for the right professional reference.
Retirement benefits can be a valuable component of your divorce settlement and financial future. Following these simple tips will enable you to make the right choices.
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