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Could Retirement Plans Be Subject to Property Division in Texas?

When younger couples in Texas decide to divorce, they may not give much thought to how their divorce will affect their retirement plans. However, this is a very important topic that individuals seeking a divorce should keep in mind, particularly if they are facing a high value divorce. In fact, according to one study, almost 25 percent of "baby boomers" who have ended their marriages reported that the divorce would leave them "worse off" when it comes to retiring, and almost 24 percent reported that they will need to remain in the workforce longer because they divorced. For these reasons, individuals of any age going through a divorce should keep retirement in mind.

Retirement accounts, like any other marital property, will be subject to property division in a divorce. This means that instead of sharing the expected retirement funds as they would have if the marriage lasted, those who divorce will find that, due to property division, they have less in the way of retirement savings. Moreover, once one divorces they go from a two-income household to a one-income household, which also affects how much a person can save for retirement.

Texas is a community property state. This means that property accumulated while married is deemed to be owned by both spouses and will be subject to division. This includes retirement accounts funded while the couple was married, even if only one spouse actually contributed to it. That being said, retirement accounts that a spouse owned and placed funds into before getting married may be deemed to be separate property owned only by that spouse.

As you can see, divorce can significantly affect one's retirement plans. Some people may find that, due to property division, they must contribute more towards their retirement plans or work longer in order to achieve their retirement goals. However, doing so may be preferable to staying in an unhappy marriage. Those who have questions about how a divorce could affect their retirement plans may want to seek legal advice, as this post provides general information only.

Source:, "Can Divorce Destroy Your Retirement?," Wendy Connick, Oct. 13, 2017

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