Your retirement savings reflect years of planning and self-denial. You didn't get to go on flashy vacations every year or buy the most expensive new vehicles because you wanted to save for your future instead.
It is reasonable for you to worry about what will happen to those funds that you have so carefully set aside if you file for divorce. For many couples preparing for marital dissolution in New York, retirement accounts will be among the most valuable and most hotly contested assets that they have to divide. If your 401(K) or pension is solely in your name, do you have to worry about your ex claiming it in your divorce?
Retirement assets are often marital property
Even though you may be the only one who ever made financial contributions to your retirement account, your spouse could still have a partial ownership interest in the account or benefits. Married couples who don't have contracts with one another stating otherwise typically need to share all of their income and property with each other.
If you don't have a prenuptial or postnuptial agreement specifically setting your retirement savings aside as separate property, you will likely have to divide the account or consider its value when dividing other properties. Even deposits made by your employer as a benefit of your job are subject to division. In some cases, you could agree to divide the account or do so because the judge determines that is what is best to do.
Other times, the financial value of the retirement assets can play a role in the division of other property. The equitable distribution standard for property division leaves a lot open to interpretation during a New York divorce, especially if you litigate.
Will you still be able to retire?
The outcome of your divorce could affect your ability to retire as you originally planned. Some people simply need to continue working for a few years after they initially retire to make up for what they lose when dividing retirement savings with their ex. Others will need to make some changes to their plans, such as moving into a less expensive neighborhood or reducing how many trips they take after retirement.
Understanding what to expect when dividing your marital assets can help you diminish the negative effects of an upcoming New York divorce.