In divorce, what happens to your retirement plan?

If you are approaching retirement and getting a divorce, your may be worried about what will happen to your retirement account. Will you have to split it with your ex? If so, will you have to work longer than planned before you can retire comfortably?

Most often, your retirement account will be addressed during the property division part of your divorce. While some couples will work out an agreement to split a retirement account, others will work out a different solution — perhaps giving one spouse the retirement assets and the other spouse an asset of equal value. One thing to consider, no matter how you think a retirement account should be handled in divorce, is whether a qualified domestic relations order is necessary to divide an account.

A QDRO gives a spouse the right to a portion of the other spouse’s retirement assets. For example, if you have a retirement account that falls under the Employee Retirement Income Security Act, your ex will need a QDRO to lay claim to any part of that account. Retirement assets that generally do require a QDRO to be split between spouses are employee stock ownership plans, 403(b) and 401(k) accounts, and profit-sharing plans. If you have an IRA or a government retirement plan, however, your ex will probably not need a QDRO to seek a portion of those assets.

If your retirement assets do not require a QDRO to be divided and you do not have a prenuptial agreement that address retirement accoutns, often a judge will consider whatever assets were obtained during the marriage to be marital property, and therefore subject to division.

Source:, “Biz Brain: Splitting a retirement plan after divorce,” Karin Price Mueller, Jan. 26, 2014

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