Divorce is emotionally and financially complex. Pennsylvania residents who find their marriage coming to an end will need to consider their more immediate financial futures as well as their retirement plans. The longer your marriage lasted, the more complex splitting up retirement savings may be.
Understand your current situation
The first step in any of the financial matters for divorce is understanding what assets and debts exist. In many married couples, one of the partners was usually responsible for managing the finances. The individual who wasn’t as involved with all the assets and debts will need to do additional work to be sure that they are aware of every piece of the puzzle to avoid any surprises later. Part of retirement planning is knowing how much you’re currently saving and what expenses you have.
Sometimes, people will believe they know their financial realities, but that landscape can change during the divorce process. What feels fair isn’t always what ends up happening. For example, one partner may have a pension that they could end up having to split or an annuity that could be divided.
It’s an unfortunate truth that no matter how carefully you’ve planned for retirement your divorce may change your plans. This is in part because things like pensions, 401(k)s and other retirement assets may split in unexpected ways. You and your soon-to-be-ex partner, or possibly a judge, will determine this during the divorce process. Talking to a financial professional as early in the divorce process as possible can be useful to protect your investments and plan for your retirement.