Retirement is a luxury not afforded to everyone. People have to plan carefully and work consistently throughout their adult lives to afford a comfortable retirement. Married couples often have a better chance of retiring because they can share their income and maintain a single home where they split expenses.
In many marriages, one spouse may have more income and a more significant work history than the other. One spouse may feel as though they depend on the other for financial stability, especially when thinking about retirement. Some people do not feel comfortable even discussing the prospect of divorce because they assume that they may lose the opportunity to retire if they end their marriage.
In cases where one spouse deprioritizes their career to focus on the family, they might assume that they cannot retire if they divorce. People who understand what happens to their retirement benefits during a divorce may feel more confident about moving on from an unhappy marriage when preparing to retire or after starting retirement.
Savings and pensions are divisible
Frequently, retirement savings accounts such as 401(k)s have a connection to an individual’s employment. It is common for a retirement savings account to be solely in the name of one spouse. Pensions accrued through employment also typically belong to only one spouse on paper.
However, equitable distribution rules give each spouse an interest in the property and income acquired by the other. Retirement savings accounts and pensions held in the name of one spouse are often still part of the marital estate. The spouses may need to directly divide those resources when they divorce or consider their value when dividing other assets.
Dependent spouses may qualify for benefits
There are two main benefits programs that support retired adults in the United States. Many people qualify for Social Security retirement benefits after years of gainful employment. Retired adults also rely on Medicare coverage to pay for basic medical needs later in life.
Both of these are earned benefits associated with employment. Thankfully, dependent spouses can qualify for Medicare and Social Security retirement benefits based on their spouse’s employment.
Provided that the marriage lasted at least 10 years, dependent or lower-earning spouses can qualify for benefits based on the work history of the higher-earning spouse. A dependent spouse seeking benefits after divorce does not prevent the other spouse from accessing the benefits that they earned or diminish what they receive from Social Security.
With appropriate planning, including proactive steps to control living expenses, many people can live comfortably during retirement even after a divorce. Knowing what to expect can give people the confidence to make major changes when they are dissatisfied with their marriages.
