Retirement savings are not just financial assets but are also crucial for future security and peace of mind. A fair division of these assets, aligned with a clear understanding of future financial planning, can help both parties move forward more confidently post-divorce. What should you know about dividing retirement benefits in a Texas divorce?
The retirement benefits earned during your marriage are likely community property.
Anything you owned before getting married, as well as inheritances and personal gifts, usually stays with the original owner. The portion of your retirement savings you set aside before your marriage will likely fall into this category of separate property.
In Texas, retirement benefits earned during your marriage are usually considered community property. This means that most things you earn or accumulate during the marriage, including retirement savings like 401(k) plans, IRAs, pensions, and other accounts, belong to both spouses, no matter whose name is on them.
The court will divide this community property along with other possessions like your home. This could mean that you will each receive a portion of your combined retirement savings, or it could mean that you allow your spouse to keep other possessions in exchange for a greater share of these benefits.
Dividing pensions can be a complex issue.
Sometimes, the spouse who didn’t work might still be entitled to a portion of their spouse’s pension. However, dividing a pension can be a complex issue. Their value includes future benefits, not just the money already put in. It can take complex calculations to determine how much a pension is worth now,.
Because splitting retirement benefits can be complicated, it might be a good idea to get help from financial advisors, tax professionals and an experienced divorce attorney. They can give advice that fits your specific situation, making sure you get a fair share of everything, including your retirement savings.
Divorce is a challenging process, and dividing your retirement savings adds an extra layer of complexity. By tackling these issues directly and with the right help, you can make work toward a fair division of your property that sets you up for financial security in the future.