Retirement and Divorce: What You Need to Know to Protect Your Future

Thinking about your retirement during divorce might sound premature, but your best bet to stay on track to achieve your goals is to educate yourself on how your long-term financial plans will be effected by divorce.

How to Prepare for Retirement During Divorce: A Financial Survival Guide

Divorce when you're staring down the barrel of retirement can feel absolutely terrifying. Maybe you've been married for 20+ years, and suddenly you're facing the reality of splitting everything you've built together. Your brain is probably screaming: "What's my future going to look like? Will I ever be able to retire?"

I get it. I've been there.

When you're considering divorce but have been in the dark about finances—especially retirement planning—the whole idea of your golden years can feel impossible to navigate. How are you supposed to make decisions about your future when you literally don't know what retirement accounts exist or how much you'll have to work with?

I recently sat down with wealth management advisor and retirement specialist Josephti Cruz to tackle this exact fear. Here's what I love about Josephti—she's not just some financial expert who's never walked this path. She's been through divorce herself AND she helps people navigate the financial side of it every single day, specifically as a Certified Divorce Financial Analyst. That combination of professional expertise and personal experience? That's exactly what you need right now.

Subscribe to The Divorce Planner's weekly newsletter and get divorce prep tips and tools delivered right to your inbox!

Stop Living in the Gray About Your Retirement

First things first—you need to stop living in the gray about your financial situation. I know it's scary to look at your retirement accounts, especially if you haven't been the one managing them. But here's the thing: you can't make good decisions about your future without information.

Josephti breaks it down perfectly: "You've got to know what you have. From there, create your baseline."

But how do you do that when you feel completely overwhelmed by the idea of untangling years of joint financial planning? You break it into bite-sized pieces that won't make you want to crawl under a rock.

Start with just 10-15 minutes a day on ONE thing:

• Day 1: Figure out your family's income streams (salary, side hustles, rental income)

• Day 2: List your current expenses (what does it actually cost to live right now?)

• Day 3: Document debts and liabilities (mortgage, credit cards, loans)

• Day 4: Identify assets, especially retirement accounts (401k, IRA, pension, savings)

That's it. Don't try to become a financial expert overnight. Your life doesn't stop because you're getting divorced—you're still juggling work, kids, and everything else that makes up your daily reality.

"But I Don't Even Know What Retirement Accounts We Have"

If you're reading this and thinking, "Alex, I literally have no idea what's in our retirement accounts or if we even have any," take a deep breath. You're definitely not alone in this, and you're absolutely not screwed.

Here's what you can do RIGHT NOW to start uncovering your retirement picture:

Start with what's already coming to you:

• Pick up the mail every day and pay attention to quarterly statements from investment companies

• Dig out your tax returns—they're treasure maps showing retirement account contributions and withdrawals

• Check any joint accounts you have access to for automatic transfers to retirement accounts

Use your legal rights:

• If your name is on any account, the financial institution HAS to give you information

• Call or visit the HR department —they can tell you about company 401k accounts and pension plans

• Request benefit statements from Social Security for both of you

Don't panic about what you can't access:

• Make a list of what you CAN find out about

• Keep track of what you can't get your hands on yet

• Remember that there will be a legal discovery process where everything gets disclosed anyway

The key is to start from where you are right now. Don't wait until you have "complete" information to begin preparing for your financial future.

Need a deeper dive on gathering financial information when your spouse controls everything? I've written a complete survival guide that walks you through exactly what to do, step by step. Check out my post on preparing for divorce when your spouse controls the finances—it's packed with practical strategies you can start using today.

The Reality Check: Your Retirement WILL Look Different

Let's be completely honest about something: your retirement planning is going to be affected by divorce. You're going to be splitting assets that you built together over years or decades, so yes, you'll have less to work with than you originally planned.

But here's what Josephti told me that I want you to really hear: "You're going to be retiring with less assets because you two are going to split everything. It's not going to be worse, but it's going to look different because you're going to be working with different pieces."

Different doesn't mean doomed. It means you need to understand what you're working with and adjust your plan accordingly.

And here's something crucial that most people don't understand about retirement accounts: not all assets are created equal. A $100,000 in your 401(k) is NOT the same as $100,000 in a savings account. That retirement money is going to be taxed when you withdraw it, so it's actually worth less than what you see on paper.

This is why you need to understand what you're negotiating for during asset division. Don't just look at the account balances—look at the tax implications, withdrawal rules, and how different types of retirement accounts will actually function in your post-divorce life.

The Biggest Mistake You Can Make With Your Retirement

You know what I see people do constantly? They rush through the divorce process because they're emotionally exhausted and just want it to be OVER. They agree to splits without understanding what they're actually getting or giving up.

I totally get it. Divorce is draining, and you want to move on with your life. But please, please don't make major decisions about your retirement future just because you're tired of dealing with this process.

"You don't need to rush," Josephti says. "Be methodical. Do what you need to do to research what you want. You need to gain a good understanding of the different assets that are up for negotiation."

This is especially important when it comes to retirement accounts because:

• Some accounts have penalties for early withdrawal

• Others have required minimum distributions at certain ages

• Tax implications vary wildly between different account types

• Some accounts can be rolled over, others can't

I've seen too many people agree to take certain retirement accounts without understanding the restrictions, only to realize later they can't actually access the money when they need it.

"I Can't Afford Professional Help With My Retirement Planning"

SPOILER ALERT! You can.

First of all, you probably can't afford NOT to have professional help during this process. The decisions you make now about retirement accounts will affect the rest of your life. One mistake in how you handle a 401(k) rollover or pension division could cost you tens of thousands of dollars.

Second, working with a financial planner doesn't have to break your budget. If you have retirement accounts, reach out to whoever oversees them and ask to schedule a meeting so you can go through your investments and assess if you're still on track to attain your retirement goals or if you need to change things around.

Want to work with Josephti? She offers different ways to work together depending on your situation:

Option 1: Six-month financial consulting program Think of it as retirement coaching with a clear beginning and end. You get organized, create a realistic post-divorce retirement plan, and learn the tools to manage your finances independently going forward.

Option 2: Ongoing asset management She manages your retirement investments and charges a percentage of assets under management. The fee comes directly from your portfolio, so you're not writing checks every quarter while you're already stressed about money.

The point is, there are options that fit different budgets and needs. The money you invest in proper financial guidance during your divorce will pay for itself many times over when you're not making costly mistakes with your retirement accounts.

Your House vs. Your Retirement: The Big Trade-Off

Here's a situation I see constantly: during divorce negotiations, one person wants to keep the house and is willing to give up retirement accounts to make it happen. Before you even consider this trade-off, you need to understand the real costs.

Keeping the house means:

• You're responsible for the entire mortgage, property taxes, and maintenance

• You're giving up potentially decades of compound growth in retirement accounts

• You're putting all your eggs in one real estate basket instead of diversifying

• You might be house-rich but retirement-poor

Sometimes keeping the house makes perfect sense—maybe you're close to retirement anyway, or you have other significant income sources. But don't make this decision based on emotions or fear of change.

Crunch the actual numbers. Consider what that house will cost you over the next 10-20 years versus what those retirement accounts could grow to. Think about whether you'll actually be able to afford to live in that house during retirement.

If you're considering keeping the family home, check out my post: Four Questions You Need To Answer If You Want To Keep The Family Home.

Be Kind to Yourself During This Process

Here's what I want you to remember: if you've never been deeply involved in retirement planning during your marriage, that doesn't make you irresponsible or naive. Couples divide responsibilities all the time—maybe you handled other aspects of your family's financial life, or you were focused on career or children.

But now you're learning something new. You're working toward understanding your own financial future. And honestly, that's pretty amazing, even if it feels overwhelming right now.

Don't beat yourself up for what you didn't know before. Be gentle with yourself as you navigate this learning curve. This is your opportunity to become financially literate about your own retirement in a way that will serve you for decades to come.

Your Next Steps for Protecting Your Retirement

If you're sitting there wondering what to do next, here's your action plan:

1. Start gathering retirement information TODAY. Even if it's just 10 minutes, begin documenting what you know about any retirement accounts.

2. Don't make any major moves without understanding the implications. This includes borrowing against retirement accounts, cashing them out early, or agreeing to splits without professional guidance.

3. Get professional help specifically for retirement planning. A financial planner who specializes in divorce can help you understand your options and avoid costly mistakes.

4. Don't rush major decisions about retirement accounts. Take time to understand withdrawal rules, tax implications, and how different accounts will work in your post-divorce life.

5. Focus on your long-term security. Yes, your retirement will look different than you originally planned, but with proper planning, it can still be secure and comfortable.

   
   

The Bottom Line About Divorce and Retirement

Look, I'm not going to sugarcoat this: divorce will definitely impact your retirement planning. You'll be working with different assets, different timelines, and different financial realities than you originally planned.

But here's what I've seen over and over with my clients: with the right preparation, professional guidance, and a clear understanding of your options, you can still build a secure retirement. Sometimes the post-divorce retirement plan actually ends up being better than the original one because you're making intentional decisions based on YOUR priorities and timeline.

All the work you're doing now to understand your retirement accounts and options isn't just for your divorce—it's setting you up for confidence and security in your new chapter. You're developing knowledge and skills that will serve you for the rest of your life.

Remember what Josephti said: "It's never too early, and it's rarely too late." Start where you are. Take it one step at a time. Your future self will absolutely thank you for the effort you're putting in now.

This process can feel overwhelming, but you're not walking it alone. There are professionals who specialize in exactly what you're facing, and there are thousands of women who've successfully navigated this same challenge.

You've got this. Really.