How is a 401(k) split in a divorce?

Generally through a separate court order in addition to the decree — for most private-sector plans a qualified domestic relations order, or QDRO. It is drafted separately, signed by a judge, and then has to be accepted by the plan administrator, who can reject it. Ask who is drafting it and by when rather than assuming the decree handled it.

Is $100,000 in a 401(k) the same as $100,000 in a Roth IRA?

No. A traditional 401(k) is pre-tax, so tax is still owed on the way out; a Roth was funded with money already taxed. The same number in each is a different amount of money to you, which matters whenever a settlement offers one against the other.

My husband’s 401(k) is only in his name. Is it his?

Not necessarily. Retirement accounts are always individually titled — there is no joint IRA or joint 401(k) — but an account in one spouse’s name can still be marital property in whole or in part, depending on when the contributions were made and your state’s law. Put it on the list and let your attorney answer it.

Should I change my beneficiaries during a divorce?

Look them up, because a beneficiary designation generally overrides a will. But do not change one without asking your attorney first: filing for divorce triggers automatic standing orders in many states that restrict exactly this, and changing at the wrong time can breach a court order.

How is a pension divided?

A pension is a promise of future income rather than a balance, so it cannot simply be halved. Valuing one is specialist work, and it can be handled by splitting the future payments or by valuing it now and offsetting it against another asset — which produce very different outcomes. Raise it with your attorney early; it is the asset most often undervalued.

Retirement Accounts in Divorce: What Each One Is

There is a moment in almost every separation where somebody slides a statement across a table and asks what you want to do about it, and the honest answer is that you do not know what you are looking at.

That is not a gap in you. Nobody teaches this. You were taught to read a bank balance, and a retirement statement is a different kind of document that happens to have a number on it.

So here is the vocabulary. Not what to invest in — that is somebody else’s job and a licensed one. Just what each of these things is, so you can read your own paperwork.

There are only two families

Employer plans. Set up by a job. A 401(k) in a company, a 403(b) in a school, hospital or non-profit, a 457 in government work. A pension — the proper name is a defined benefit plan — is also an employer plan, but it behaves completely differently, and I will come back to it.

Individual accounts. Opened by a person, no employer involved. A traditional IRA, a Roth IRA, and for self-employed people a SEP or SIMPLE IRA.

Then, off to one side, a plain brokerage account — investments with no retirement wrapper and no special tax treatment.

That is the whole map. Everything on your statement is one of those.

The distinction that changes the money

Every one of those accounts is either pre-tax or already taxed, and this is the single most expensive thing to not know.

Traditional anything — traditional 401(k), traditional IRA — went in before tax. Nobody has paid tax on that money yet. Tax is owed on the way out.

Roth anything went in after tax. It has already been taxed.

Which means: $100,000 in a traditional 401(k) and $100,000 in a Roth IRA are not the same amount of money. They are the same number. What you would actually end up with differs, sometimes substantially.

Now put that beside the house. $100,000 of home equity is a third thing again. If a settlement offers you one against the other as though they were equivalent, they are not, and the paperwork will not tell you so. That trap has its own article.

Whose name is on it is not the same question as whose it is

Everywhere else on this site I tell you to write down whose name is on each account, because it decides who controls it. Retirement accounts are the place that rule bends.

There is no such thing as a joint IRA or a joint 401(k). They are individually titled by law — always one person’s name.

But an account in his name alone can still be marital property, in whole or in part, depending on when the money went in and the law of your state. His name on the statement is not a verdict on whose it is.

Women talk themselves out of asking about accounts for exactly this reason. Don’t. Write it on the list and let your attorney tell you how your state treats it.

They do not move the way normal accounts move

You cannot transfer a retirement account by agreeing to. Each family has its own mechanism, and using the wrong one is how people trigger tax and penalties that never needed to happen.

Employer plans generally need a separate court order, on top of the decree, telling the plan administrator what to do — for most private-sector plans that is a QDRO, a qualified domestic relations order. It is drafted, signed by a judge, and then approved by the plan itself, which can reject it. Government and military plans have their own equivalents with different names and rules.

IRAs do not use a QDRO. They move by a transfer made under the divorce instrument, handled directly with the custodian.

You do not need to know how to do any of that. You need to know it exists, that it is a separate piece of work with its own cost and its own timeline, and to ask who is drafting it and when rather than assuming the decree did it.

Pensions are not balances

A pension does not have a pot with your name and a number. It is a promise of income later, usually for life, based on years of service and a formula.

Which means it cannot simply be halved. Valuing one is specialist work, and there are genuinely different ways to handle it — splitting the future payments, or valuing it now and offsetting it against something else. Those produce very different outcomes for you.

If either of you has a pension, that is a sentence to say out loud to your attorney early. It is the asset most often undervalued, because it does not look like money on a page.

Five things to find on every statement

While you are gathering — and this is day five of the practice if you are working through one:

The plan or account type, in its exact words. "Retirement" is not a type.
The administrator or custodian, and the account number.
Whether there is a loan against it. A 401(k) loan quietly reduces what is actually there, and it does not always show up on the front page.
Vesting, on employer money. Some of an employer’s contributions may not be the employee’s yet.
The beneficiary designation — which is its own paragraph.

About beneficiaries

A beneficiary designation on a retirement account generally overrides your will. Whoever is named on that form receives it, regardless of what the will says.

So: look yours up. All of them. Most women have never seen the form.

Then stop. If you are separating, whether you may change a designation — and when — is a live legal question, because filing for divorce triggers automatic standing orders in many states that restrict exactly this. Changing one at the wrong moment can put you in breach of a court order.

Look it up, write down what it says, and ask your attorney what you are permitted to do. That is the whole action.

What this article deliberately does not do

It does not tell you what to invest in, whether to move anything, or what any of it should be worth to you. That is advice, it depends on facts no article can see, and it requires a licence I do not hold.

What it does is make you able to read your own statements — so that when the paperwork lands on the table you can say that is a traditional 401(k), it is pre-tax, there is a loan against it, and it needs a QDRO, and the conversation that follows is a much shorter and much cheaper one.

The Accounts Nobody Explains