Maybe you loved your career but became a stay-at-home parent because you thought it was the best thing for your kids. You don’t have any retirement savings of your own and can’t command a competitive wage because you have been out of the workforce for so long. Perhaps you have spent your entire adult life working, and you worry that your spouse will demand so much of your retirement savings that you won’t be able to retire as planned.
You may even know someone who had an unfortunate experience when they divorced, and their story makes you worry about the financial consequences of ending your marriage. Are you at risk of having nothing for retirement after an Oklahoma divorce?
You have to share your marital property
Oklahoma, like many other states, has an equitable distribution law for contested divorces. If you don’t have a marital agreement and can’t settle property matters on your own, a judge will divide up property and debts from during your marriage.
The goal is a fair outcome based on your marital history and personal circumstances. Retirement savings and even pension benefits accrued during the message are often subject to property division. Any balance accrued during the marriage is potentially subject to division, even if the account is in one spouse’s name and they started it before the marriage.
If you need to divide the actual account, you can avoid taxes and early withdrawal penalties with a qualified domestic relations order approved by the courts. This way, you can split the retirement savings without diminishing the shared balance because of penalties.
You don’t always have to divide the account
Dependent spouses can absolutely ask for their share of a retirement account that is not in their name, but dividing the account isn’t the only way to fairly handle that property. The courts can also consider the value of the retirement savings when distributing other property, like vehicles and real estate.
Neither spouse will find themselves absolutely without retirement benefits. In fact, dependent spouses who don’t have a strong work history to help them qualify for Social Security retirement benefits can potentially make a claim against what their spouse accrued. A post-divorce claim by a dependent spouse won’t diminish what the other spouse receives from the Social Security Administration either.
Careful planning and a focus on minimizing unnecessary expenses can help you ensure that you have resources for retirement even after your Oklahoma divorce.