Karen Ann Ulmer, P.C.
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Posts tagged "retirement"

Divorce and Your Retirement

As a family lawyer for Bucks and Montgomery County, we help clients just like you through the complicated process of divorce. When clients walk in our door, they are usually very concerned about paying and receiving alimony and child support and then working out a schedule for their children.  During the initial meetings and discussions, we remind them of the importance of looking down the road a few years to retirement. 

Treatment of Pensions in Divorce

Pensions are subject to division in a divorce to the extent one of the parties earned the pension benefit during the marriage. The court will equitably divide the marital portion of a pension plan after considering all the relevant factors in equitable distribution. The marital portion of a plan would be the portion that accrued from the date of marriage through the date of separation. An entire pension will be marital if the parties were married the entire time a party earned benefits under the pension. In other cases, a coverture fraction is applied based on the total years of service compared to the number of years of marriage. Pensions are often a deferred distribution asset meaning that each party will receive their share at retirement age of the participant. There is the option to do an immediate offset of the marital portion of the pension if there are other assets of comparable value.

Social Security Retirement

Social security retirement benefits are payable based on the individual's earnings history as well as age of retirement. Full retirement age is presently 66 years old. The benefit is reduced if electing to receive the benefit earlier. The minimum age to start collecting is presently 62 years old. An individual can elect to receive benefits under the spouse's earnings history instead. An individual may receive up to 50% of their spouse's benefit. This does not impact the spouse's benefit in any way. An individual may elect to receive under their spouse's benefit if their earnings history was substantially higher.

Pensions and Retirement in Divorce

Pensions, as well as other retirement plans, are often one of the assets up for division in a divorce. The court will equitably divide the marital portion of a pension plan after considering all the relevant factors in equitable distribution. The marital portion of a plan would be the portion that accrued from the date of marriage through the date of separation. In some cases, the entire pension will be marital depending on the timing of the marriage alongside the start date of the pension plan. The marital portion will also include investment experience on the marital portion that accrues post-separation. It will not include contributions by the employee made post-separation.

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