You may have heard that a Qualified Domestic Relations Order (QDRO) can be used to divide retirement accounts, often during a divorce. For instance, one spouse may be an employee earning a pension, and their ex may use a QDRO to ensure they receive a portion of that pension to support their retirement after the divorce.
However, if you are going through a divorce and you obtain a QDRO, does that automatically mean you will receive half of the pension or retirement account? It is not that simple.
Assigning a percentage
A QDRO can indeed be used to assign you a percentage of the account, but it does not guarantee that you will receive half. The division typically depends on when the account was earned and the length of your marriage. For example:
- If you were married for 30 years and your spouse earned their entire pension during the marriage, the court may consider the pension a marital asset and award you half of it using a QDRO. You were married the entire time, so the pension is similar to other wages or benefits.
- Conversely, suppose your spouse worked at the company for 10 years before your marriage, continued working there for 15 years during your marriage, and plans to work for another five years after your divorce. In that case, your marriage covered only half of the 30 years they spent earning the pension. You might then be entitled to half of the portion earned during the marriage—25% of the total.
This example highlights how specific calculations can vary significantly based on individual circumstances. QDROs are nuanced and complex, requiring careful legal attention. Be sure you know what legal steps to take as you navigate this process.