How to Calculate a Divorce Settlement Retirement Amount

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Marital property subject to division between spouses in a divorce case often includes all or part of a retirement account or plan, according to "The Complete Divorce Handbook: A Practical Guide" by Brette McWhorter Sember. Consequently, as you head to or attempt to settle a divorce, you need to understand how to calculate the division of a retirement account or plan as part of a settlement agreement. The manner in which a retirement account or plan is allocated between spouses depends upon whether your state utilizes a community property or equitable division standard, according to Cornell University Law School. Community property requires an even division of assets. Equitable division requires a fair, although not equal, distribution of property.

Obtain a copy of the family law statutes section of division of marital property. The statutory provisions are available through the website maintained by your state's legislature or the American Bar Association.

Read More: Spouse's Rights to Settlements

Determine if you live in an equitable division or a community property state. Most states follow the equitable division standard. Less than 10 are community property states, according to "The Complete Divorce Handbook: A Practical Guide."

Determine the increase in value of the retirement account or plan during the course of the marriage. Add up employee contributions, employer contributions and interest earned from the date the marriage started until you separated from your spouse. Only this portion of the retirement plan or account is part of the marital assets.

Divide the total increase in value evenly between both spouses if you reside in a community property state. Although some deviation from this standard is permissible in a settlement between spouses, the judge reviews the overall agreement to ensure that the asset distribution generally complies with the laws of the state.

Divide the total increase in a fair manner between spouses if you live in an equitable division of property state. The use of the fair standard intentionally is vague, according to the American Bar Association Section of Family Law. For example, if both spouses maintain comparable retirement plans, avoiding dividing up each plan can represent the fair and appropriate resolution.


  • If you elect to remove funds from an account or plan before retirement, you face the prospect of paying significant penalties and taxes. Consider using a qualified domestic relations order, or QDRO. Through this order, the share of both spouses in a retirement account plan is determined during the divorce. However, the proceeds from the plan or account are not paid until the retirement of the employed spouse. Using a QDRO saves the payment of penalties and prolongs the imposition of taxes, which is one of the benefits of a retirement account of plan.


  • Dividing property from a marriage during a divorce represents an emotionally and legally challenging endeavor, in most cases. Consider retaining the services of an experienced divorce attorney to assist you with this and other divorce-related tasks. Information on retaining a lawyer, including contact information for local and state bar organizations, is available from the American Bar Association.