Divorce and Retirement Accounts: The Role of the QDRO Form

Divorce doesn’t just impact your current finances. It can also affect your retirement.

Divorce and Retirement Accounts: The Role of the QDRO Form
Updated May 13, 2024
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Divorce can be one of the most emotionally and financially challenging life events you’re likely to experience. However, your divorce won’t just impact your money situation today and in the near future. It could also affect your retirement finances. In fact, one of the biggest money mistakes you can make when planning for retirement is not accounting for divorce.

Understanding your options and having a plan to cover your retirement can help ease money anxiety related to your divorce. Plus, if you work carefully together with your former spouse, you have a chance to give both of you the best possible start post-divorce.

Here’s what you need to know about navigating your retirement plan in and after a divorce, as well as options for dividing your assets.

In this article

The basics of retirement accounts and divorce

First, it’s important to understand that retirement accounts are divided during a divorce based on various factors, including state law. Depending on the situation, one person might be awarded the entire balance of a retirement account, or the divorce decree might stipulate a way to divide the assets.

Unless there’s a prenuptial agreement in place, there’s a good chance that retirement assets created during the marriage will be divided up and each spouse will receive a portion of the benefits. Potential considerations during this process include when the accounts were established, how long the partners have been married, and whether one partner stayed home instead of working.

In general, the money you had in a retirement account before the marriage is considered yours, and you won’t have to worry about your ex claiming it. There are exceptions, though, so make sure you understand the situation.

Some of the retirement accounts you’re likely to see divided during a divorce include 401(k)s, 403(b)s, IRAs, and pensions. Retirement accounts, especially those established after the marriage date, are considered marital assets, even though these accounts are typically listed under only one name.

What is a QDRO form?

A qualified domestic relations order (QDRO) is a legal document that’s commonly used to divide up certain retirement accounts during a divorce. A domestic relations order form is typically prepared by attorneys and the terms of the plan specify how to pay out your share of benefits. A QDRO and DRO are essentially the same thing, only the QDRO will be “qualified” by a retirement plan administrator.

In many cases, accounts like 401(k)s and 403(b)s and regular pension plans can be divided using a QDRO form. Government and military pensions are a different story, though, so in this case, you may want to hire a professional who specializes in domestic relations law. This person can help you figure out how to divide your retirement assets.

For the most part, as long as you have the QDRO, it’s possible to withdraw funds from a tax-advantaged retirement account and put them into a new account without penalty. However, to avoid penalties, it’s essential to ensure the QDRO is followed. You can work with the plan administrator to complete the steps necessary to transfer the assets from one account into another.

How accounts are generally divided

When dividing retirement assets during a divorce, it’s essential to understand how to complete transfers in a way that avoids additional penalties. Here are some common retirement accounts and best practices for dividing them up.

401(k) or 403(b)

As mentioned, you can divide up your 401(k) or 403(b) plan using a QDRO. Depending on the situation and how the plan administrator handles QDRO forms, you might end up receiving a lump sum immediately. You can then transfer that money to your own retirement account, including putting it into an IRA. However, some plans pay out the sum later or might even make periodic benefit payments.

Pay careful attention to the structure of how the money is paid out, and make sure you follow all required procedures when putting the money into your own account.

For the most part, as long as you follow the steps related to the QDRO and use it to move the money, you shouldn’t need to worry about taxes and penalties — as long as you don’t try to use the money for non-retirement purposes before you’re eligible to do so. Remember these are funds considered part of your retirement savings, so you’re still subject to age and other restrictions if you want to avoid immediate taxes and penalties.

Roth IRA

When dividing the assets in a Roth IRA, it’s important to consider that the money in the Roth has already been taxed, so it might be treated a little bit differently. Additionally, with a Roth IRA, any transfer of assets between ex-spouses within a year of the divorce decree could be considered a “transfer incident to divorce.” In general, this means that transfers made within that timeframe don’t require any special documentation and won’t be subject to penalties.

This can be one way to use the Roth IRA as an offset to other assets. However, again, it’s important to cover your bases when making the transfer. This is because these are still retirement funds and subject to the rules governing retirement accounts. Presumably, if you’re receiving assets from a Roth IRA as a result of divorce, you’ll put them in your own Roth account.

Traditional IRA

As with a Roth IRA, you can use a transfer incident to divorce to divide up a traditional IRA. If you wait longer than a year, though, you’ll need to show your divorce decree as evidence you can make the transfer without penalty. After six years, there’s a presumption that the transfer isn’t related to the divorce, and there could be penalties and taxes.

When transferring a traditional IRA, it’s essential to pay attention to the tax implications. If you decide to move the assets received from a traditional IRA into a Roth account, you’ll have to pay applicable taxes, similar to how you would when completing a Roth conversion.


Similar to a 401(k) or 403(b), a pension can be divided with a QDRO form, but the process of dividing it up is a little more complicated. With a defined contribution plan, like a 401(k) or IRA, there’s an account balance that’s already available. That account balance can be divided accordingly. But pensions are defined benefit plans, which means there’s a promised payment later.

In the case of a pension, a more complicated calculation might be made, and you could instead receive certain payments at your normal retirement age.

When negotiating retirement benefits as part of the divorce, it might make sense to agree to take a smaller pension claim in return for a larger portion of other accounts, such as 401(k)s. Speak with an experienced divorce lawyer to get a feel for what might make a good trade-off in terms of dividing assets.

Steps to take after you divide your accounts

After you’ve divided your accounts, it’s time to move forward with planning your financial future. Here are some of the steps to take:

  • Rework your budget. Now that you’re on your own and have some clarity with your accounts and retirement balance, it’s time to review your budget. Figure out whether you need to keep saving for retirement, and how much you can afford to add to your retirement accounts each month.
  • Update your beneficiaries. Check all your retirement, life insurance, and other accounts. Update beneficiary information to reflect the new situation. If you don’t want your ex listed as a beneficiary of your death benefit, you will need to designate someone else.
  • Review and update personal accounts. Check to make sure your personal accounts are up-to-date. Change your records, mailing address, and other information on bank and credit card accounts.
  • Check your tax filing status. Consider speaking with a tax professional about how to manage your taxes going forward. Depending on your situation, you might be able to contribute to a Roth IRA as a single person, even though you couldn’t while married. The reverse might also be true. Find out your options related to taxes and accounts.
  • Create a new investing plan. Don’t forget to create a new investment plan. If you haven’t invested before because your ex-spouse handled that aspect of your finances, now is a good time to learn how to invest money. Your portfolio should reflect your new life situation and goals. Your new portfolio strategy could help you succeed in the future.
  • Consider how you’ll manage money in a future relationship. Finally, give some thought to how you want to manage money in a future relationship. Think about whether you want to combine finances and whether a prenuptial agreement makes sense if you get married again. Having an idea of how to proceed can help you protect your assets in the future.


How do QDRO forms work?

QDRO forms are legal documents that are used to divide up certain retirement assets in a divorce. These documents are generally prepared by attorneys and could be used to divide accounts like 401(k)s, 403(b)s, and certain pension plans.

Can you write your own QDRO form?

While it’s possible to file a QDRO form without an attorney, it’s generally a good idea to work with an attorney to draft the plan. Doing so could help ensure that your retirement assets are divided up correctly during a divorce.

What happens to your retirement accounts in divorce?

Retirement accounts are typically considered marital property, so these assets will generally be split with your ex if you choose to get divorced. Divorcing couples often work with an attorney to draft a QDRO form specifying how certain accounts like 401(k)s, 403(b)s, or pension plans will be divided up. Other accounts, like traditional and Roth IRAs, can be split through a transfer incident to divorce.

Bottom line

Divorce is rarely easy. There’s a lot of back and forth, especially if there are many assets and accounts to divide. Carefully consider all the assets you’re entitled to, and speak with a knowledgeable lawyer about your options. Also, consider how different scenarios could impact your bottom line and help you with your retirement.

Once the divorce decree is finalized, be thorough as you follow your QDRO requirements to transfer certain retirement assets between your ex’s account and yours. Then, make a plan to stay on track with your finances and build wealth for your future.

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Author Details

Miranda Marquit

Miranda Marquit has covered personal finance for more than a decade and is a nationally-recognized financial expert and journalist, appearing on CNBC, NPR, Forbes, Yahoo! Finance, FOX Business, and numerous other outlets.