If you're getting a divorce, you probably don't spend a lot of time thinking about how it will impact your retirement -- but it's a valid concern. A study by the Insured Retirement Institute found that 24% of divorced baby boomers said they'd be worse off in retirement due to their divorce, and 23% said they'll need to work longer as a result. That means you may have to take measures to protect your retirement plans -- and the sooner you do so, the better.

Divorce and retirement

Even if your divorce happens decades before you retire, your retirement savings will likely take a major hit. First, a divorce usually means that the funds in your retirement accounts are divided between yourself and your ex-spouse, so your retirement savings will shrink substantially. And second, divorce means that you'll at least temporarily become a one-income household -- so you'll probably end up saving a lot less for retirement than you had planned, at least in the near term.

Frustrated man looking at computer

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Splitting your retirement savings

State and local laws determine how your retirement savings gets divvied up between you and your ex-spouse. If you live in a community property state, then any assets that you or your spouse acquired during your marriage are considered jointly owned, regardless of which of you actually saved the money. As of this writing, the community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin (Alaska and Tennessee allow you to opt into a community property system if you choose).

The remaining states use "equitable distribution" to figure out who owns what after a divorce. Under equitable distribution, it's up to the judge to decide the fairest way to split the goods. Judges generally consider factors like how long the marriage lasted, how well each spouse will be able to earn a living alone, age, health, and so on. Some judges will also factor in alimony and child support when deciding how to assign the existing assets.

The surest way to protect your retirement savings is to set up a prenuptial agreement that specifies who gets what percentage of the money in these accounts should your marriage end. If you don't have a prenup, your best bet is to try to come up with a compromise with your ex-spouse that will work out to your mutual advantage. In community property states, there's not much else you can do; a retirement account that you owned and funded prior to your marriage should be safe, but any post-marriage retirement assets will be split 50-50 between you and your spouse. In an equitable distribution state, getting a good divorce lawyer and coming up with a compelling argument for the judge can help you to get a favorable decision in court, but it's definitely not a sure thing.

Building a new plan

Once you know how much of your existing retirement savings you'll get to hang on to, it's time to draft a new retirement plan. You'll need to factor in both the reduction of your existing savings and (most likely) the reduction of your future income. On the other hand, now that it's just you, you'll probably be able to set a lower goal for how much income you'll need in retirement. A retirement calculator can make this entire process much easier by doing the heavy lifting for you.

After you've played with all the revised numbers and come up with a new plan, the hard part begins: You have to actually start saving the amount called for in your plan at a time when your financial life is probably a mess. If your target contribution is truly out of your reach, start small. For example, if your calculations tell you that you need to save $1,000 per month to hit your retirement goal and your income is currently $3,000 per month, it's unlikely you'll be able to make that happen. Instead, compromise and save a smaller amount until your income catches up with your saving requirements. Once your lifestyle has recovered, you can do some extra saving for a while until you're back on track.

When your goal is out of reach

If your income has dropped significantly due to your divorce and you also lost a fair chunk of your existing retirement savings, you may need to reassess your retirement plans and set a more realistic goal. There are two basic options to take when you're trying to lower your retirement savings requirements: either scale down your retirement plans so that you can get by with a lower income, or delay your retirement by several years so that you have more time to earn and save money (or both). The important thing is not to panic -- divorce is not the end of your retirement dreams, just a detour on the road to financial independence.