How Are Retirement Accounts Divided After Divorce?

When a couple get married, they legally share everything they own with each other, even their individual retirement accounts. This means that even in the event of a divorce, the individual retirement accounts will also be split fairly between the two parties.

To make sure that everything is done properly, you have to make sure that you consult the help of an Arizona divorce lawyer or any kind of divorce attorney within your state.  Aside from a lawyer to know you and your ex-spouse’s rights, you also need to know how the retirement accounts are divided. You must know the factors to determine the amount and the computation.

Factors to Consider

Before the court decides on the amount each party will get, they need to consider a few factors. These include the length of marriage and the assets earned during the marriage.

First, the courts will consider the length of the marriage. For long marriages, the division is usually 50% for each party. For shorter marriages, the division may vary according to the discretion of the court.

Also, the courts will only look at the retirement assets that have been earned during the marriage. This is the amount split evenly between the two parties. Anything earned before the marriage is not part of the computation.

Computation for Retirement Division

When the court computes the retirement amount, they will first evaluate the current market value of the benefit. From there, the court will use either of two computation methods for getting the amount.

These are the Immediate Offset Method and the Deferred Distribution Method

With the Offset Method, the current market value is placed against the value of the other properties that the couple owns, also known as the marital property. Instead of the retirement benefit, one spouse may give the other a property of equal value, if they both agree to it. Of course, the one who is making more income is the one who’ll be able to give the property away.

The other method, which is the Deferred Distribution Method, only divides the retirement amount when it is payable under the plan. This means that the division is only made sometime in the future. The court will compute the final amount that the ex-couple will give each other once the court order is made. They will only receive the amounts in that future payable date.


As long as both parties agree to the amount, then there won’t be any problems. In order to get the amount that each party gets from each other, a lawyer may be of help. Of course, the lawyer will only tell the ex-couple their individual rights and give the computation.

The arrangement is then given to the court for a final approval. If the court approves of the final amount and the arrangement (including the method of computation and the final amount), then the ex-couple will sign the court order waiver. Upon the agreement of both parties, the order will become valid and binding.

News Reporter