People in Kansas should take steps to protect their retirement in case of divorce. IRAs, 401(k)s and pension plans may all be subject to division in divorce. Negotiating property division can be emotionally challenging, but it is also important to set those emotions aside and treat the process as a business decision.
If a person decides to keep a retirement account in exchange for other assets, it is important to be aware of any limitations. For example, making withdrawals from an IRA before the age of 59.5 can incur penalties. The couple will need a document called a qualified domestic relations order if they are dividing a 401(k) or a pension plan.
If the marriage has lasted at least 10 years and one spouse has earned considerably less than the other, after retirement, the lower-earning spouse might be able to draw Social Security benefits on the other spouse’s salary. The choice is between taking full benefits based on their lower income or 50% of the spouse’s benefit. The spouse still receives the same amount whatever choice is made.
A significant income disparity might also affect how a retirement account is divided. Even though only one spouse may have contributed to it, that spouse might be able to rebuild their savings much more quickly than the lower-earning spouse. Spousal support might also be an issue in marriage where there is a significant income disparity. This may not be permanent and might only last long enough to allow the spouse to retrain for a different job. It is different from child support, which usually lasts as long as the children are minors but may sometimes go on longer. Parents may also want to negotiate how they will pay for children’s college educations, but in most cases, a parent cannot be compelled to contribute to this.