When spouses divorce, one of the most frequently sought-after assets are retirement plans. Retirement plans give individuals the financial cushion they need to go into retirement without having to worry about whether they can continue their standard of living. Please continue reading and speak with our experienced New Jersey divorce attorneys to learn more about retirement assets and divorce and how our firm can help you through every step of the legal process ahead. Here are some of the questions you may have:
How are retirement assets divided in a divorce?
Oftentimes, retirement plans penalize individuals if they withdraw funds early. For this reason, oftentimes, when couples divorce, they will divide the funds by having an attorney file for a Domestic Relations Order, which can either be a Qualified Domestic Relations Order or a Non-Qualified Domestic Relations Order. These will help avoid penalties and taxes when dividing retirement assets. Plans that qualify for early withdrawal in divorce include the following:
- Simplified Employee Pensions (Often shortened to SEPs)
- 401(k) plans
- 403(b) plans
- Traditional IRAs
- Savings Incentive Match Plans for Employees IRAs (SIMPLE IRAs)
That being said, there are also various plans that do not qualify for early withdrawal without being penalized or taxed, including the following:
- Certificates of Deposits (CDs)
- Bank Savings Accounts
- Mutual Funds
- Money Market Funds
How do I know the value of my retirement plan?
Certain retirement assets, like 401(k)s do have definitive dollar amounts, however, there are other factors that may come into play, including any dividends and payouts on the retirement plan, the date of plan inception, and pension plans. For this very reason, when determining the value of your retirement plan in the equitable distribution process, you must retain the services of a knowledgeable Bergen County divorce attorney who has helped countless individuals do so in the past. We understand how important your retirement plan is to you, and we will do everything in our power to preserve what is yours. If you have any additional questions or you are ready to get started, all you have to do is pick up the phone and give us a call today. We are always here to help.
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.