If you are currently going through the divorce process, there is a very good chance that you are worried about how your assets will be distributed. Many people worry about their homes, vehicles, and more, though one of the most important assets that may be up for equitable distribution that people do not consider are their retirement plans. When couples divorce, oftentimes, their retirement plans are at stake, which can mean that their financial cushion for their retirement years may not be as significant as they thought. Please continue reading and reach out to our New Jersey divorce attorneys to learn more about how retirement plans are divided in New Jersey divorces. Here are some of the questions you may have:
How are retirement assets distributed in New Jersey divorces?
Generally speaking, when someone withdraws funds from their retirement plans early, they will most likely face certain penalties, which is why when these plans are equitably distributed in divorce, couples will divide the funds by having an attorney file a Domestic Relations Order, which will either come in the form of a Qualified Domestic Relations Order or a Non-Qualified Domestic Relations Order, which essentially allows those couples to avoid certain penalties and taxes when dividing their retirement assets. Some plans that you may withdraw early from are as follows:
- 403(b) plans
- Traditional IRAs
- Simplified Employee Pensions (Often shortened to SEPs)
- 401(k) plans
- Savings Incentive Match Plans for Employees IRAs (SIMPLE IRAs)
There are other retirement plans that you may withdraw from early, though they will be penalized, and they are:
- Bank Savings Accounts
- Mutual Funds
- Certificates of Deposits (CDs)
- Money Market Funds
How much is my retirement plan worth?
Various factors will determine how much your retirement plan is worth, such as the date of your plan’s inception, pension plans, and any dividends/payouts on your retirement plan. Of course, other plans will also have set dollar amounts, such as 401(k)s. Dividing these assets and determining their worth can be quite complex, which is why you must hire a knowledgeable New Jersey divorce attorney on your side who can work to protect your hard-earned assets. Give us a call today to learn more about retirement assets and divorces in New Jersey.
Contact our experienced Bergen County firm
At Townsend, Tomaio & Newmark, our attorneys have extensive experience helping clients to understand and protect their legal rights before, during, and after the divorce process in towns across New Jersey and Bergen County, including Hackensack, Ridgewood, Paramus, Teaneck, and Fort Lee. To speak with our team of divorce lawyers today in a free and confidential consultation regarding your concerns about your divorce, please contact us online, or through our Hackensack, NJ office at (201) 397-1750.