How To Keep Divorce From Ruining Your Retirement

retirement planningRick Harkins and his wife, Michelle Cortes-Harkins, founded Harkins Wealth Management in 2008. Rick and Michelle began offering financial planning, but they soon began receiving an influx of referrals from divorce attorneys.

Eventually, they have split into two different practices: One that covers the wealth management side of things, and the other helping clients manage the many financial nuances of divorce. As the divorce aspect continued to grow, Rick and Michelle obtained a Certified Divorce Financial Analyst designation.

Now they are able to guide clients through the complex world of finances that inevitably come up during divorce.

Rick and Michelle recently joined DadsDivorce to talk about some of the financial challenges caused by divorce and what a person can do toward ensuring that divorce doesn’t wreck their retirement planning.

Can you run through some of the most common mistakes you see men make during the divorce process that ends up derailing their retirement plan?

Rick: Obviously it’s a very stressful time for both spouses going through a divorce. When they get stressed, they tend to just want things to be finished and sometimes what we find is people will give up maybe a little more than they should and that can be really detrimental to their retirement.

Michelle: When it comes to future retirement, you want to make sure you’re documenting if your spouse makes more money than you do, if you contributed to social security, and other things of that nature. All the different pieces that might make a difference on down the road need to be documented.

I think sometimes people look at the forms or the process and they’re just so overwhelmed and they’re like, “OK, I’ll just estimate them all. Which is usually not a good idea.”

Prior to filing for divorce, are there some steps that can be taken to make sure their retirement savings are protected and they can proceed with retirement as planned when they do actually divorce?

Rick: People definitely need to sit down and take a really clear picture of their debts, their income, their overall resources. … They need to be really clear and concise in making sure everything is up to date. That can simplify much of the process.

What about 401ks, IRAs and those kinds of retirement accounts. What would someone need to know about how those will be affected by a divorce?

Rick: A lot of times in the process, we find they just split things up 50/50 and that’s it.

But there are a lot of states that go into the equitable division of assets so it’s not always a 50/50 case. They’ll look at the details and the implications of splitting things up.

A lot of times with 401k plans and pension plans, a qualified domestic relations order comes into play – a QDRO – but they also need to be careful because a lot of companies accept the attorney’s drafted QDRO and sometimes a company has its own QDRO. There are also assets that can’t be split based on the QDRO so you need to take a close, educated look at it.

Michelle: When you have a retirement plan like an IRA or 401k, you don’t always just say, “OK, 50/50.”

Also, there are some retirement plans that can’t be divided that way. So if you have anything with the government or the military or anything like that you probably need to get somebody who specializes in that so you don’t make mistakes.

“The opinions voiced in this material are for general information and are not intended to provide specific advice or recommendations for any individual. Securities and Financial Planning offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC.” Rick Harkins and Michelle Cortes-Harkins are registered to transact securities business with residents of the following states:: RI, MA, CT, FL, ME, NJ, OH, PA, NY, DE, IL, MI”

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Shawn Garrison is an Online Editor for Lexicon, focusing on subjects related to the legal services of customers, Cordell & Cordell and Cordell & Cordell UK. He has written countless pieces dealing with the unique child custody and divorce issues that men and fathers face. Through his work on CordellCordell.com, CordellCordell.co.uk, and DadsDivorce.com, Mr. Garrison has become an authority on the complexities of the legal experience and was a content creator for the YouTube series “Dad’s Divorce Live” and additional videos on both the Dad’s Divorce and Cordell & Cordell YouTube channels. Mr. Garrison has managed the sites of these customers, and fostered the creation of several of their features, including the Cordell & Cordell attorney and office pages, the Dad’s Divorce Newsletter, and the Cordell & Cordell newsletter.

2 comments on “How To Keep Divorce From Ruining Your Retirement

    Hello, Im in the middle of a divorce. Me and my current spouse were married for 13 months, as soon as she got pregnat had the baby she split. Im hitting retirement 1 Nov 16. Im paying $700 from a previous marriage and getting hit with temporary orders $581 child support, $175 spousal support till 1 Dec16 and paying a ton in out of state supervised visitation. My retirement paycheck is only going to be $1,800. This divorce has so far cost me $20k. I feel im being taken advantage of in every aspect. If iam retiring from active duty, and my income is being reduced by more than 65%, the state of Oklahoma cant possibly expect me to pay what im currently paying in childsupport. There estimations are based on current income not my retirement income 1 November 16. What should i do?

    I am a 59 year old male who went through a train wreck divorce 1.5 years ago after 19 years of marriage and got the short end of the stick after spending over $100K to lawyers. I lost my boys, my house, all pre-marital assets ($300K), most of my father’s inheritance (he died during my divorce) and I am required to pay my ex-spouse $3K per month for 6.5 years. The asset split was 65% mother, 35% father. Retirement may be a lost dream for me unfortunately but if I can help just one person here I would like to.
    My advice/experience after taking this divorce to court (the other side would not agree to anything I asked for):
    1 Get an EXPERT Divorce Lawyer-they should only focus on divorce (it may cost you double but it will be worth it)
    2 DO NOT get married in an “equitable division of assets state” like Massachusetts. The judge has the discretion to give you NOTHING. It is quite ludicrous
    3 Have your future spouse sign a pre-nuptial agreement

    Good luck

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