Splitting Retirement During Divorce

  • Posted on: Dec 23 2021
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Going through a divorce can be an emotional roller coaster as well as challenging from a financial standpoint. This involves the ability to be well informed of the decisions you make when the division of assets takes place between you and your other half.

The Divorce and Retirement Plan

As a valuable asset to have, retirement is not something to take lightly. This is especially true for those going through a divorce while trying to enjoy being retired. However, knowing that retirement will need to be split can be a tough pill to swallow, which may also include taxes that may need to be paid. However, when the process is known, then it should be a little easier.
When divorce is being planned, and you know a retirement plan will be involved such as a 401(k), then half of it will be for you. This will hold in court, given that no prenuptial agreement was signed. There is one thing that you should know if the primary money maker was your spouse, how can a share of the retirement account be protected?

Well, in order for your half of the retirement to be safe from an early withdrawal, there will be a Qualified Domestic Relations Order set in place by the divorce court.

What the Qualified Domestic Relations Order (QDRO) Is

The QDRO is a protection order that will protect assets that are rightfully yours. This court order is the same used when a judgment is made for child support or alimony. It also has the authority to instruct how payments of the shared retirement will be paid to a spouse. Other than protecting your share of assets, it also prevents an early withdrawal from occurring, which could then be deposited into a separate account not affiliated as an employee account. You should avoid thinking that your share of assets will be safe if your divorce decree states they will be. It is important to remember that a QDRO is applicable to only those retirement plans which the IRS considers as tax-qualified and is secured through the Employee Retirement Income Security Act (ERISA). The QDRO is not applicable to government or military retirement pensions.

Putting Together Your QDRO

When a Domestic Relations Order is sought, the qualifying part can only be achieved through an administrator of the retirement plan or the divorce court itself. Having an attorney with QDRO experience can make the entire process easy as well as ensuring that the QDRO includes everything within the divorce settlement. Your attorney will also assist in keeping your rights secured beyond what a QDRO may be capable of doing.

Outlook of a Retirement Following a Divorce

Often times an individual may feel confused about splitting a retirement account. However, in many states, the funds are recognized as equal assets earned during the marriage, which gives a spouse equal right to their share. If a retirement account was already existing prior to a marriage, then that will not be accessible to you. For this, you should advise your attorney to be certain. Most commonly, the assets shared will only be those that were earned as marital assets throughout the marriage. If a 401(k) is the sole source, then payment may be dependent upon the setup of the plan. If a lump sum was chosen at the time of account opening, then a lump sum will be provided. If payments will be made periodically, then you will have periodic payments, so the plan will not change the payout style just because of a divorce. When a pension plan is settled through a divorce, then it will make monthly payments to you once you hit retirement.


Splitting a retirement through a divorce can be very stressful. More so when the spouse receiving half never made a contribution to the account. However, understanding that marital assets are always split should make things easier. But for those who still have questions regarding retirement and divorce, then you should call us today to go over the details.

Posted in: Divorce Law, Family Law, Uncategorized