What happens to Retirement Accounts and Pensions in Divorce?

Divorce is emotional enough—but once you start sorting through the financial side, especially your retirement savings, things canstart to feel really overwhelming. One of the most common (and often most confusing) questions I hear is: “What happens to our retirement accounts and pensions?” Whether you’re just starting the divorce process or you’re nearing the finish line, understanding how these assets are handled can help you understand how protect what you’ve worked so hard for—by avoiding costly mistakes. This blog will answer the following questions:

• Are Retirement Accounts Marital Property?
• How Are Retirement Accounts Divided?
• What is a QDRO- and Why is it so important?

Let’s dive into the first question:

Are Retirement Accounts Marital Property?

In most cases, yes. Retirement savings accumulated during the marriage are typically considered marital property, even if the account is in only one spouse’s name. That includes:

• 401(k), 403(b), and other employer-sponsored plans
• Traditional and Roth IRAs
• Pensions and deferred compensation plans

The rules vary depending on where you live:

• Community property states (like California or Texas) usually split marital assets 50/50.
• Equitable distribution states (like Colorado) aim for a fair division, which may not always be equal. It’s also worth noting that any retirement savings you brought into the marriage might be considered separate property—but any growth or contributions during the marriage could be subject to division

How Are Retirement Accounts Divided?

Each type of retirement plan has its own rules—and missing a step could mean penalties, taxes, or giving up more than you intended. Here’s how the most common accounts are typically handled:

• 401(k), 403(b), and Employer Plans
  These require a Qualified Domestic Relations Order (QDRO) to divide the assets without triggering taxes or early withdrawal penalties.
• Traditional and Roth IRAs
  IRAs don’t need a QDRO, but the division must be spelled out in your divorce decree and transferred properly. Doing it wrong can mean taxes and penalties.



• Pensions
  Pensions are often undervalued or overlooked—but they can be valuable. You may be entitled to a portion of your spouse’s future pension payments, or a lump-sum present value. Many pensions also require a QDRO.
• Military, Government, and Public Pensions
  These pensions follow different rules than private plans and can be more complex to divide. Some have restrictions based on how long you were married during your spouse’s service. For example, military pensions follow the 10/10 rule for direct payments. State and local plans—like those for teachers, police, or firefighters—often have unique formulas and rules for dividing benefits or assigning survivor rights.

Bottom line: These pensions can be very valuable, but the rules vary widely—so make sure to review the plan documents and get professional help.

What Is a QDRO—and Why Is It So Important?

A Qualified Domestic Relations Order (QDRO) is a courtapproved document that tells a retirement plan administrator how to divide a qualified retirement plan (like a 401(k)) in a divorce.

A QDRO:

• Lets you divide a retirement account without early withdrawal penalties
• Allows the non-employee spouse (called the alternate payee) to receive their share
• Must be approved by the court and the plan provider

Without a QDRO, you risk taxes, penalties, or losing your rightful share.

Want to learn more? Read my blog on QDROs here.

Common Mistakes to Avoid

Avoid these common pitfalls when dividing retirement assets in divorce:

• Assuming a Roth IRA and a 401(k) of the same value are “equal” (they’re not—taxes matter!)
• Failing to get a pension properly valued
• Forgetting to update beneficiary designations
• Cashing out retirement funds early
• Skipping a QDRO when one is required

How to Protect Your Retirement During Divorce

If you’ve spent years building your retirement, this part of the divorce deserves special attention. Here’s how to protect your future:

• Work with a divorce-savvy financial advisor or CDFA®
• Review all pension plans—get valuations if needed
• Don’t rush a settlement until you understand the tax impact
• Think about future income needs—not just account balances today

Final Thoughts: You Deserve a Secure Retirement—Even After Divorce

Your retirement is more than just numbers on a statement—it’s your future and potential financial independence. And while figuring all of this out can feel overwhelming, you don’t have to do it alone. Want a simple guide you can refer to? Download my PDF:

“What to Know About Dividing Retirement Accounts in Divorce”

You’ll learn:

• The types of retirement accounts
• When you need a QDRO
• Common tax pitfalls
• The right questions to ask your attorney and financial advisor

Let’s Talk!

If you’re navigating divorce and want help understanding your retirement options, I’m here to support you. As a financial advisor who specializes in supporting through divorce, I can help you make decisions that feel smart, informed, and empowering—for today and for your future.

Stay Proactive. Stay Empowered. Stay Confident.

Brianna Beski is a financial advisor and CDFA at Raymond James, based in Colorado. She focuses on helping people have confidence in their financial futures. For the rest of the story, visit her website or email her at brianna.beski@raymondjames.com.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Brianna Beski and not necessarily those of Raymond James. Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors we are not qualified to render advice on tax or legal matters. Raymond James does not provide tax or legal advice. Please consult your own legal or tax professional for more detailed information on tax issues and advice as they relate to your specific situation.
Raymond James & Associates, Inc., member New York Stock Exchange/SIPC