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Should You Give up Your Retirement Account in a Divorce?

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A divorce can be a difficult time for all the parties involved. In addition to the emotional toll of the separation, you also have to figure out how to divide your assets. That can turn into a fierce battle, especially if you don’t part ways on good terms.

One asset that is quite tricky is a retirement account.

In most cases, divorcing couples have a few big marital assets: a house (or more), vehicles, retirement funds, other properties, and so on. When it comes to the retirement fund, the state will generally calculate the part of it that will be subject to asset division from the date you were legally married until the day when the divorce complaint was filed.

retirement account divorce

Now, here comes the question: should you choose the house or the retirement fund?

It is not uncommon to find yourself having to choose between being left with the house or the marital retirement fund. For many divorcees, choosing the house may seem like the smart option. However, most act based on their emotions. What any experienced St. Louis divorce attorney will tell you is not to make financial decisions when you are highly emotional.  

Be sure to discuss these matters with your lawyer and even a trusted financial adviser to decide what would be the best option for your future.

Sure, your house may hold a lot of emotional value and provide a feeling of security and comfort that is so much needed during a divorce. But, in some cases, it would be a disadvantage to choose the house over the retirement account. A house can cost you a significant amount of money each year, while a retirement fund doesn’t use any of your resources. 

What to Consider When Making Your Decision

No answer is universally valid in this type of dilemma, because each person has certain expectations, future possibilities, and safety nets. It all really depends on whether you can support the cost of maintaining the house by yourself (at least for a while) and if you have a retirement plan or not.

Try to consider the long term value of a house or other marital assets you are fighting for, versus a retirement plan that you could fund through your contribution, cash out for another investment or just keep as your savings account until needed.

What You Need to Know If You Want Your Spouse’s Retirement Account Share

If you have decided that you would rather be left with the retirement fund rather than the house, then you need to make sure there aren’t any clauses or hidden expenses tied to it. An experienced attorney should be able to tell if your spouse’s retirement plan can get you the amount of money you are hoping for. That depends on some legal aspects that you might not be entirely aware of.

Look for an experienced attorney that has previous experience with this type of asset division and was successful at obtaining a fair share for their clients. 

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