Qualified Domestic Relations Order | QDRO
Retirement and divorce – get to know QDRO
It is heart wrenching to be a spectator of a divorce. Many of us have witnessed one or more of our friends go through the Big D or, even worse, we’ve experienced it ourselves. No one wants to see a marriage dissolve – the parents, kids or the friends of the couple intertwined in the impending break-up. However, the divorce trend among couples over 50 is becoming a startling statistic. In the last 20 years, the divorce rate among baby boomer couples has doubled.
Divorce can have dire consequences for women and their retirement. During years of marriage, many women have focused on the day-to-day career of raising a family…instead of focusing on building any personal wealth.
If you’ve spent your life taking care of family while your spouse earned the income, here’s something you need to know – QDRO. A QDRO is a “Qualified Domestic Relations Order ” that provides a legal mechanism for receiving a portion of the retirement benefits earned by your spouse during the years of your marriage. It requires the employer to pay the non-employed spouse retirement benefits as a result of the divorce.
For many women, retirement savings may be the main source of income generation after a divorce is finalized. For some, retirement savings are the ONLY source of funds that can generate an income during retirement. Obtaining a QDRO can make the difference between a more secure retirement and a desperate situation in the golden years.
If you find yourself a divorce’s door, ask your attorney about the option of enacting a QDRO into your settlement.
RESEARCH — Also, the QDRO arrangement permits your ex to withdraw his/her share and roll the money over into his or her own IRA to the extent current withdrawals are permitted by the terms of the qualified retirement plan. The IRA rollover procedure allows your ex to take over management of the money while continuing to postpone taxes until funds are withdrawn from the IRA. Once again, the important point from your perspective is that your ex will be the one who owes the taxes.
QDRO and Immediate Annuity ~ Example
Janet was a stay-at-home mom her entire marriage. After turning 48, she and her husband divorced. Because of her extended time out of the job market, Janet had very little marketable skills and all of a sudden she had bills, with no job prospects in sight. She was desperate. However, AnnuityWatchUSA.com’s Matt Redding was able to help by suggesting that she place a portion of her divorce settlement in an Immediate Annuity to generate much-needed income to help her get on her feet. Matt placed the remainder of her settlement in a deferred Fixed Indexed annuity to help set her up for a more comfortable retirement with guaranteed lifetime income and principal protection.
To learn more, contact the annuity experts at Annuity Watch USA today!
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