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A divorce does not have to signal the end of retirement plans

When a couple decides to end their marriage, it may feel like the end of many financial plans. However, a divorce does not always mean that one's retirement plans are now up in smoke. California residents who fear that they will not be able to achieve their dreams of a relaxing life after their work years may still be able to reach their goals, albeit with some adjustments. 

A recent survey that questioned whether a divorce would change retirement plans for respondents found that nearly 25 percent indicated a divorce severely impacted their ability to retire as they had planned. Of that percent, an estimated 23 percent stated that they would be required to put off retirement while they worked to secure enough savings. Even if retirement is far into the future, it is not too early to make the necessary adjustments in order to obtain the amounts needed to reach long-term goals.

In states with community property laws, such as California, retirement accounts that were started during a marriage or any account that was contributed to during it are considered communal property and are subject to division -- though funds contributed to a retirement plan before a marriage are deemed separate property. Spouses are considered equal owners of community property. In equitable distribution states, and absent an agreement between the parties, a judge will determine what constitutes an equitable split of the couple's assets. Once a divorce is settled, each former spouse will likely need to re-evaluate what amount is needed for retirement and how best to reach those new goals.

Some may have to revise their earlier retirement goals if their income will not enable them to meet their previous projections. However, an individual may find it easier to plan for and to replenish the amounts that a divorce siphoned out. Regardless of whether retirement plans need to be adjusted, California residents typically benefit by seeking the assistance of an experienced family law attorney in order to ensure that they exit a divorce in the best financial position possible.

Source:, "Can Divorce Destroy Your Retirement?", Wendy Connick, Oct. 13, 2017

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