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Protecting your retirement during a divorce

On Behalf of | Aug 16, 2023 | Property/Debt Division |

When you started your divorce process, were you surprised to learn that your retirement accounts could be in jeopardy? You have likely saved most of your working life to create some security when you retire, so dividing these assets can impact your current and future financial situation.

Therefore, if you find yourself getting a divorce, these are some ways you can protect your retirement accounts.

Learn Indiana divorce laws

Indiana is not a community property state, so all your assets are not necessarily divided equally. Instead, Indiana is an equitable distribution state. This means that the judge will divide your assets based on equity. Often, this division involves equal distribution, but not always.

Separate your marital and personal assets

Marital assets include everything you and your spouse accumulated during your marriage. Unfortunately, this also includes every payment you made to your retirement accounts and any interest these accounts accrued while you were married. Fortunately, the money you had in your accounts before you got married is a personal asset. Any inheritance you received is also a personal asset. If you owned your home, vehicle, etc. these remain yours.

Calculate your account balances

Because equitable often, though not always, means equal, as you calculate your retirement investments and interest, you should do the same for your spouse’s accounts. These balances can offset each other, protecting your financial future. For example, if you contributed $1 million to your accounts and your spouse contributed $800,000, the difference is only $200,000, which you may find ways to divide through other assets.

For the best results, use the information you gathered to negotiate the division of your marital assets. Although you may have to give up something you really want, a little creativity can protect your retirement.


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