4 necessary steps that protect your retirement after a divorce

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If you've recently concluded divorce proceedings, you're probably ready to put the turmoil behind you and move on in a more positive way. You're almost there!

There are just a few crucial steps left to wrap things up -- and don't skip them. These action items will make sure all goes as well as possible during retirement and at the end of your life.

1. Have you changed your beneficiary designations to someone other than your ex?

When you die, most of your estate will probably go through probate, but items such as life insurance and retirement accounts typically don't. The proceeds go straight to the designated beneficiary. For divorcees, this can mean a potentially tragic mistake. If you leave your ex listed as the beneficiary on any account, your ex will inherit that account. It may be possible for a child or children to set that right -- or it may not.

2. Take the necessary steps to divide your retirement accounts per your divorce decree.

As part of the property division process, you've agreed (or been ordered) to divide up your 401(k)s, IRAs, Roth IRAs, pensions and other retirement accounts. Now that your divorce agreement or order has been finalized into a decree, it should contain a Qualified Domestic Relations Order, or QDRO, which the IRS requires for these to be divided.

The process is not automatic. Take your QDRO to your retirement plan providers and have someone there perform the transfers. Careful: Depending on your age, you may have only one opportunity to do a plan-to-plan transfer without paying a 10-percent IRS penalty. If you need the money, discuss the penalty with your financial planner or divorce attorney.

3. Make sure your retirement accounts reflect your goals, not your ex's.

If you haven't been primarily in charge of saving for retirement, you may find that the asset allocation in your accounts is more or less aggressive than you need. Your ex may have had a higher or lower risk tolerance than you do.

Now is a good time to review and re-set your goals for retirement savings. You may want to save more or draw back. Consider your job, personality and savings goals, then adjust your contribution and asset allocation accordingly.

4. Did you know you may still be eligible for Social Security through your ex's account?

If your marriage lasted 10 years or longer and you don't remarry before age 60, you have a choice to make. You're eligible for either your own Social Security retirement funds or half of your ex-spouse's, but not both. Run the numbers and, when the time comes, take the higher one.

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