How to Protect Your Retirement Savings During Divorce
It's a gut-wrenching experience, and that's before the money issues. Approximately 1.2 million couples file for divorce each year, and the financial side of things can be just as upsetting as ending a relationship -- especially when it comes to retirement. Keep these points in mind as you navigate your way back to single life.
The average price of a divorce in 2016 was $15,000, but costs vary significantly depending upon the nature of your split -- e.g., amicable or contested -- and the size of your legal fees. You may not have the liquid funds to cover all the related expenses, and it can be tempting to cut your losses by tapping into retirement savings.
This is a no-no. Not only will you pay taxes on 401(k) and IRA withdrawals before ages 55 or 59 1/2, respectively, you'll also incur a 10% penalty if a judge hasn't yet ordered you to divide your assets.
Source: Fool.com
