One reason that people sometimes give for avoiding a divorce is that they are worried about retirement. Consider the fact that gray divorce rates have been rising and many people who are getting these divorces are also nearing retirement age. These two things certainly play a role in the rising number of American divorce cases.
The concern is often that one partner will have a retirement plan and the other will not. As a married couple, their plan was to use these benefits – such as a pension plan – so that they could both retire. But if you ask your spouse for a divorce and they are the one who controls that retirement plan, does that mean that you lose your ability to retire?
Using a QDRO
Your concern does make sense, but what you need to know is that you can use a Qualified Domestic Relations Order (QDRO) to solve this problem. This document can be applied by the court and it is a binding order that must be followed. It specifies that, when your ex retires, they do have to divide their retirement benefits with you.
The reason for this is that these retirement plans are slowly earned over the course of a person’s employment. Once they have worked there for 30 years, then they’re eligible for a pension, for instance. But they have been married during a portion of this employment, so the benefits earned at that time count as marital assets. Benefits earned before or after a marriage generally do not count, so even a QDRO may not split a pension up perfectly evenly.
You do have options that you can use, so it’s important to know exactly what steps to take to protect your future and your finances.