Retirement is an important issue to address in divorce mediation. Frequently people have several kinds of retirement accounts–traditional IRA’s, SEP IRA’s, 403B’s, or pensions. Some people are employed by small businesses or large corporations; others work for state or federal government. It is important for people to gather statements and to share account information.
Social Security is another source of retirement income. “If you are divorced, but your marriage lasted 10 years or longer, you can receive benefits on your ex-spouse’s record.”
During mediation people share information about retirement savings. Clients also find out what paperwork is required to divide accounts, as well as fees or penalties that will need to be paid. Each kind of account may have different requirements. Clients also decide when the best time is to divide or liquidate particular accounts.
It is extremely important for people to understand the tax implications of decisions related to retirement accounts. For instance, the tax implications of using funds in an IRA as a down payment on a house may be different from rolling over the same funds into another retirement account. Clients frequently consult with accountants, financial planners, and attorneys. Then they are able to make decisions that make financial sense.