Cindy Allen & Associates PLLC

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Funding retirement accounts and preparing for divorce

Oklahoma couples who are getting married and who have a substantial difference in income might want to consider how they fund each of their retirement accounts. They might adjust the percentages they contribute in order to make the amounts the same.

While no one wants to think about a divorce at the same time that they are planning for their wedding, doing so can be a smart financial move. In some cases, people can be left in a bad financial position after a divorce, and taking steps to make sure the financial relationship is a more equal one may protect both parties down the road.

This extends beyond just ensuring that finances are somewhat equal. Both spouses should also understand how to manage the family finances, make a budget and pay bills. While often in a couple it is the case that one person is more of a financial planner than the other, it is important for both individuals to take responsibility. As couples near retirement, it is also important to begin considering how they will shift from relying on an income to relying on the retirement account. One other point to remember when trying to fund retirement accounts equally is that if both are company-sponsored, one might be significantly better than the other.

Divorce among older adults is high compared to previous generations, so it is more likely in the past that retirement accounts will be an important aspect of property division in a divorce. An older couple might also be more likely to have a high-asset divorce since they have had years or decades to accumulate assets. Other complications may arise if one individual owns a business or if there are complex shared investments, and their respective attorneys will take these matters into account when attempting to negotiate a settlement agreement.

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