Your spouse has an employer-sponsored retirement plan. They have slowly been earning these retirement benefits, which are held in an account like an IRA. You do not have your own retirement savings because you always assumed you and your spouse would retire together.
But you now know that will not be happening because the two of you are getting divorced. What you are worried about is losing your retirement benefits. Your spouse has not even retired yet, so is there any way for you to split those retirement benefits in advance?
Using a QDRO
Yes, you can do this, and it is often done with a document known as a qualified domestic relations order (QDRO). This document can establish you as an alternate payee. It can also determine the percentage of the account that you are entitled to, based on when your spouse earned it, the length of your marriage and other such factors.
For example, say that the court examines the documentation and determines that you should get 40% of the account. The money can be withdrawn from your ex’s account and put into an account for you, and there is no early withdrawal penalty from the IRS. If your spouse is under 59 1/2, taking money out of their retirement account early would usually incur a 10% tax penalty, but this is waived if they are just transferring the money into an account for their ex during a divorce.
Splitting up retirement benefits is just one step to take when ending your marriage. It can help to work with an experienced law firm.
