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Barbara L. Jouette, Attorney, P.C.
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Protect retirement assets during divorce

It is important for people in Texas who are going through a divorce to make sure that their future retirement is protected. Although experts generally advise that people should save enough to live on around 70 percent of their income prior to retirement, the financial ramifications of divorce can often mean that many people struggle thereafter to keep their retirement plans on track.

Meeting with a financial planner may be an important step for people to begin getting a sense of what their retirement assets and new budget look like. In some cases, individuals may choose different investments for their retirement accounts. Budgeting must take into the account that housing and other expenses are no longer shared between two people. If children or others share the home and there are going to be changes in expenditures, they may need to have the new budget discussed with them.

Individuals should not plan to start drawing down their Social Security retirement benefits before they reach the age of 70 if possible. This is in line with the advice of most experts. Furthermore, individuals who do not remarry may be able to claim benefits based on their former spouse's contributions if the marriage lasted longer than 10 years.

Since Texas is a community property state, all or a portion of a person's retirement accounts may be subject to equal division as part of a divorce decree. While there is sometimes a possibility of negotiating this, in a high-asset divorce this may become complex. In some cases, an individual may give up a claim on one asset in exchange for another. The temptation might be to take the asset that will lead to cash in the short term, but individuals should keep their future in mind as well. An attorney may be helpful in negotiating an agreement on behalf of a divorcing client that would cover property division as well as other relevant issues.

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