Divorce can present a major financial challenge for families in Washington at all income levels. In particular, how retirement accounts are distributed can make a big difference in the future stability of each party. The primary income earned may want to preserve as much as their earning as possible while a stay-at-home parent may be concerned that their lack of participation in the workforce has ruined their chances at a comfortable retirement.
When one person in a divorce has significantly more retirement savings than the other, making sure each party is treated fairly can be complicated. Like other assets, any contributions to retirement that occurred during the marriage can be partially claimed by the other spouse. Ex-spouses can also make partial claims on the pensions and social security benefits earned during marriage. A financial planner may be able to help establish the long-term value of such benefits.
Once divorced, each person should create a new retirement plan that accounts for their new situation. In some cases, it may be easier to save for a single person rather than a couple. People entering the workforce after a long absence may find planning a challenge. Each person’s retirement plan will be unique to their own income, age, living expenses, and a few other important factors.
When making decisions about spousal support, alimony, and other financial issues in a divorce, each party may benefit from legal representation. A lawyer might help their client negotiate or argue for favorable terms that will protect their financial future whether they were the sole income earner or a stay at home parent. Arrangements may be made amicably through mediation or settled in court if necessary.