Pension Gap After Divorce: No 3-Year Waiting Period

What is the Pension Gap After Divorce?

The pension gap arises when a couple divorces, and the retirement savings accrued during the marriage are divided. This can result in both ex-partners having less in their pension funds, negatively impacting their retirement planning. This is particularly problematic if one of the ex-partners was not fully employed during the marriage and, therefore, did not accumulate substantial retirement savings.

Pension Fund and Divorce: How is the Division Handled?

In the event of a divorce, the retirement savings accrued during the marriage are usually split equally between the spouses. This division ensures that both parties receive a fair share of the retirement benefits accumulated during the marriage, regardless of who contributed more to the shared pension assets.

No 3-Year Waiting Period to Address the Pension Gap

Contrary to widespread belief, there is no legally mandated 3-year waiting period to address the pension gap after divorce. This means affected individuals can take immediate action after the divorce to optimize their retirement planning and close the gap.

Steps to Close the Pension Gap

• Voluntary Contributions to the Pension Fund: A crucial step to closing the pension gap is making voluntary contributions to the pension fund. Additional contributions can help increase retirement savings and improve future pension benefits. This is particularly beneficial for those who were not fully employed during the marriage.

• Private Retirement Savings: Besides the pension fund, private retirement savings (Pillar 3a and 3b) offer another way to strengthen retirement planning. Regular contributions to private savings plans can help close the existing gap.

• Career Reorientation: Returning to work or increasing employment can also help boost retirement savings, thereby reducing the pension gap.

Use the Caveo-BVG Splitting Calculator

To analyze your individual situation and find the best strategy to close your pension gap, we recommend using the Caveo-BVG Splitting Calculator. This handy online tool helps you understand the financial impact of a divorce on your pension fund and identify possible measures.

Conclusion

The pension gap after divorce is a challenge that can be overcome with targeted measures. It is important for affected individuals to take proactive steps and explore their options early on. Personalized advice from a financial planner or retirement specialist can help develop the best strategies and optimize retirement planning. Remember, there is no 3-year waiting period to close the pension gap – take action now to secure your financial future.

Use the Caveo-BVG Splitting Calculator to get a clear overview of your situation and plan the necessary steps.