Divorce: the dreaded “D” word, is one sure way to throw a wrench in your retirement. Severing ties can be an arduous process, and one of the most probing questions people ask when going through a divorce is, “how will this impact my finances?”
Getting a divorce is more than splitting things down the middle, especially if you are nearing or in retirement. As a Federal Employee there are a multitude of factors to consider like your survivor benefits, social security and pension.
It’s highly suggested to seek professional advice to best manage this process. Your attorney, your agency, the Office of Personal Management (OPM) and your financial advisor should all be involved, especially because your former spouse and other family members are legally considered and could be awarded benefits by the court. Your retirement property could suffer a cut of more than half, including that which you have saved in your Thrift Savings Plan and pension plan.
More specifically, awarded benefits could and will affect those under the Civil Service Retirement System (CRSR) and Federal Employees Retirement System (FERS) differently. For instance, if you or your former spouse will receive a significant pension through CSRS, it is unlikely you will be eligible for social security benefits at all. Or, if you do qualify for social security, factors such as how many years you have been married or if your ex-spouse has re-married, will then affect eligibility, as well as how much of your benefits or pension will be awarded to them.
This is only a small snap shot of all the details to know and understand when going through a divorce. For further information on divorce and what it could mean for your finances, sign up for the MyFedLife webinar for Thursday, April 5. You will specifically learn what to do and how your benefits are affected including your Social Security, pension, insurance plan and coverage, survivor benefits, and your Thrift Savings Plan investments.