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How to protect your retirement assets during your divorce

On Behalf of | Apr 3, 2023 | Divorce

Divorce takes a toll on you emotionally and financially. You may have to move out of your family home, negotiate visitation with your children and divide your assets.

One of the major assets you may want to avoid dividing is your pension or retirement accounts. These are ways to protect your retirement during a divorce.

Identify marital versus separate property

Any asset you had before you got married is a separate asset. In addition, any contribution you made to your retirement before your marriage is yours. Therefore, calculate your pre-marriage contributions. A judge will not divide these funds during your divorce.

However, any interest you gained on these accounts during your marriage is marital property. In addition, any funds you contributed during your marriage are marital property. Therefore, a judge can divide these assets.

Learn your plan rules

Some plans allow you and your former spouse to receive lump-sum or annuity payment distributions upon retirement. This would prevent you from having to liquidate your account right away. You would only share the distributions with your ex, saving you significantly in taxes and penalties.

Calculate your spouse’s contributions

You can balance your contributions with those of your former spouse. If your ex contributed to a retirement account and earned interest, calculate the amount contributed as well as the interest. This can severely limit or eliminate any division of your own accounts.


Finally, you may need to sacrifice assets you would rather have in negotiation to save your retirement assets. Calculate the value of the retirement assets less any taxes and penalties you face upon early withdrawal and find assets that are an equivalent amount.

You can protect your financial future and retirement by proceeding as amicably and quickly as possible through your divorce. Be flexible and open to uncommon solutions.