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Dividing your retirement in divorce: You can plan ahead

One thing that you may face during your divorce is the division of assets you hadn't considered. One of those assets may be your retirement. What's the right way to split retirement, or should you try to avoid it?

If you want to keep your retirement your own, you may want to negotiate a different asset in exchange. However, you can seek out a split of a retirement plan that you or your spouse has. Individual retirement accounts are split with the transfer incident to divorce process, while other plans, like your 401(k) may be split with the Qualified Domestic Relations Order.

Remember that whoever receives an asset will be responsible for the taxes in most cases. Before you agree to take on income or agree to give it away, look into how this will affect your taxes in the long term. If you don't label your asset split correctly, you could both be taxed and penalized for early withdrawal if it takes place.

After you split your plan or receive an agreement, update your beneficiaries, so you know what happens to that money in the case that you pass away or get remarried. You'll want to make plans ahead of time to make sure you're never caught off-guard when it comes to where the money's going.

Our website has more information on dividing your assets and retirement, so you can learn more about the best ways to protect yourself and your assets during divorce. With the right help, your divorce can be fair for you and the other party, so you can move on with your life.

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