Pensions, Retirement Plans, Deferred Pay, and Social Security
When dividing assets, don’t forget about the retirement funds. More than half the value of assets transferred in divorces each year are retirement funds. Because retirement plans are complicated and not readily convertible to liquid assets that can be spent, they can be the last thing on your mind when you are getting divorced. But overlooking them could be a costly mistake.
A pension plan may be either a defined contribution plan or a defined benefit plan.
Defined Contribution Plans
A retirement plan where the employee’s annual contribution is specified is a defined contribution plan. Most companies have this type of retirement plan. A 401(k) plan is a ...