A divorce can affect your life in many ways, especially financially. Divorces can alter retirement security because the process itself can be costly, and many individuals reach into their retirement savings to pay for legal services. This means those funds are either no longer deposited into their retirement accounts because that money is needed for living or legal expenses, or monies are removed from the protections IRAs.
Other retirement funds are afforded, which usually results in taxes and penalties for their withdrawal. This also means the value of future income is dissolved, which is the concept of “present value.” Present value states that an amount of money today is worth more than that same amount in the future. Thus, divorces can affect retirement savings because parties to the divorce spend money on legal proceedings now instead of keeping it in their invested retirement vehicles. As a result, it loses the tax benefits and growth it accumulated during the marriage.
Full article here: https://swaay.com/how-to-stop-divorce-from-ruining-your-retirement-savings
