Depending on your age and perspective, retirement may be a long way down the road or it could be right around the corner. You might not feel like you should worry about retirement savings yet or you may have been putting money aside for years. Wherever you are in your journey to retirement during a divorce, it is a topic you need to consider. If you are ready to move forward with a divorce, contact the experienced Chicago divorce attorneys of Fay, Farrow & Associates, P.C. to learn more about how dissolving your marriage can affect your financial future, including your retirement prospects.
The Importance of Retirement
You will retire one day, and when that day comes, you will need to have a significant financial savings to support your daily life. It can be difficult to determine how much money you need to retire, but you have to take into account inflation and potential medical care. If you wish to have an active and adventurous retirement you need to estimate the cost of travel.
If you have been married a long time and the retirement savings is based primarily on your spouse’s employment or Social Security, you need to ensure you receive a percentage of that retirement savings in the divorce settlement. It can be dangerous to ignore retirement savings when you are negotiating a property settlement or dividing the marital assets.
A Variety of Retirement Savings Sources
You and your spouse may have retirement savings in different places. There is not always one specific retirement account for a couple. When you ask for a portion of retirement savings during a divorce, make sure to look for:
- A defined contribution plan, aka a 401(k)
- A defined benefit plan, aka a pension
- An individual retirement account (IRA)
- Future Social Security benefits
Women Need to Focus on Retirement
The news is full of stories about how people are not saving enough for retirement, and many studies show that women fall behind men in preparing for life after work. It is wrong to make generalized assumptions based on gender, but data shows it is common for men and women to contribute similar amounts to retirement while they work yet many women still end up with smaller balances when it is time to retire. This can happen for a variety of reasons such as women taking more time away from work or being less likely to invest in stocks. Whatever the reason, women tend to live longer than men and need to focus on having a healthy retirement savings.
Consider a Financial Advisor
An experienced divorce attorney like those at Fay, Farrow & Associates can advise you on the importance of retirement savings and seeking what you need during a divorce. However, you might also benefit from working with a professional financial advisor. A financial professional can help you better understand your retirement needs, your prospective financial position after the divorce, and the tax consequences of your divorce settlement. The attorneys at Fay, Farrow & Associates have a network of professional advisors that often help their clients.
Contact a Chicago Divorce Attorney for Help
If you are headed into divorce, contact Fay, Farrow & Associates to learn more about your options for obtaining retirement savings. You should not leave a marriage without your fair share.