Taking Care of Your Retirement Benefits

Review Retirement Plan

Consider retirement plan distribution decisions carefully. After a house, pensions, 401(k) plans, and the like are often a divorcing couple’s second largest asset.
Federal law allows ex-spouses to receive a share of benefits earned by a worker during the marriage. Typically, this is accomplished with a Qualified Domestic Relations Order (QDRO), which is a court-ordered document that tells the retirement plan administrator how to divide benefits between divorcing spouses.
If a spouse needs immediate income and does not want to wait years to receive benefits, he or she can negotiate for cash or property of equal value to the other spouse’s retirement assets.
Individual retirement accounts (IRAs) do not need a QDRO to split up but, rather, a divorce decree showing that they are to be transferred from one spouse to the other.

Check on Social Security

Get a Social Security benefit estimate based on your earning history and your ex-spouse’s. If you were married at least 10 years and are not remarried at the time you apply for benefits, you are entitled to receive the higher of the benefit based on your own earnings record or an amount equal to up to 50 percent of your spouse’s Social Security benefit.
The earliest age workers and ex-spouses can receive benefits is generally age 62. If a marriage is close to the 10-year mark, it may pay to delay the divorce until the 10-year requirement to earn benefits based on an ex-spouse’s record is reached. This is especially true if one spouse earns significantly less than the other.