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About to divorce? Don't forget about your retirement

Life changes are inevitable and can upset even the most carefully laid plans. This can be a troubling realization for people in Iowa, especially as they deal with emotionally stressful situations, such as divorce. Many divorcees are understandably concerned about their future financial stability, especially regarding their retirement. Remaining alert and aware during proceedings can help individuals ensure that their personal interests are protected even as they deal with asset division.

In the absence of a carefully worded prenuptial agreement, retirement funds are considered marital property. As with all marital property, retirement savings must be divided during asset division. Since most retirement savings are usually stashed in 401(k)s or similar accounts, and they typically cannot be cleaved in two and distributed.

As an equitable distribution state, Iowa family law focuses on couples finding the fairest approach to dividing their property. There are many factors to consider when dividing a retirement account, including penalties for early withdrawal, if the account was started prior to a marriage and other related issues, including length of the marriage. However, such complicated matters often end up being decided by a judge.

Despite pervasive myths about property division during divorce, it is unlikely that one party will make away with the majority of marital assets. This includes retirement funds identified as marital property, which will be divided between parties in a manner that is considered fair to everyone involved. While it might not mean an equal, 50/50 split, it will generally reflect all of the different factors that divorcing couples, mediators and/or judges must take into account.

Source: host.madison.com, "Can Divorce Destroy Your Retirement?", Wendy Connick, Oct. 13, 2017

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