The average American works for more than 40 years, earning money and organizing their savings, so they can have a comfortable retirement.

In many cases, retirement savings are in one spouse’s name, and they begin accumulating savings years before they get married. Even so, this leads many people to wonder: in the event of a divorce, is an ex-spouse entitled to one’s retirement?

Dividing retirement can be a complicated matter

It is true – retirement assets are not exempt from property division in divorce.

The process of dividing these retirement savings under Maryland’s equitable distribution guidelines can be complex, and it must be done with great care to:

  • Calculate how much spouses will receive
  • Determine how spouses obtain their portion
  • Avoid financial or tax penalties

In many cases, individuals must obtain a qualified domestic relations order (QDRO) to divide employment-based retirement accounts.

The retirement savings individuals earn during the marriage are often considered marital property, and therefore must be divided. But the prospect of dividing this asset is not often an individual’s only concern.

How could this affect one’s retirement savings?

Many people might be aware of the fact that they must divide their retirement assets in their divorce. However, their primary worry is often how much property division will affect their savings. How much of their savings will remain for when they retire?

The National Institute on Retirement Security recently published a study that found, in 2016:

  • Married women held an average total of $50,126 in retirement savings, while divorced women had an average of $38,613
  • Married men had savings averaging $84,874, while divorced men had roughly $58,951

Of course, the amount of savings an individual has varies significantly by their age group, their job and their financial habits. But that does not change the fact that property division and divorce can still have a large impact on one’s retirement savings.

Thankfully, there are preemptive steps that individuals can take to prepare their finances before the divorce. Making up the difference after property division can be stressful, but with careful planning, it is still possible for individuals to have the comfortable retirement they worked for.