Puja Sachdev | July 8, 2025 | Divorce
Retirement accounts are often among the most valuable assets in a divorce. If you’ve spent years building a pension, 401(k), IRA, or another retirement plan, you might worry about what happens to it if your marriage ends. In California, the answer depends on several factors, including when the retirement funds were earned, whether a prenuptial agreement exists, and how the assets are divided during the divorce.
Here’s a breakdown of how retirement is handled in a California divorce, including what legal tools you can use to protect your financial future.
Understanding Community vs. Separate Property in California
California is a community property state regarding property division. That means most assets and debts acquired during the marriage belong to both spouses equally. This includes retirement benefits earned during that time, even if only one spouse contributed.
By contrast, any retirement funds earned before the marriage or after separation are typically considered separate property and not subject to division.
Let’s break it down:
- Community property: Contributions made to a 401(k), IRA, or pension while married
- Separate property: Contributions made before marriage or after the date of separation
If a retirement account has both community and separate portions, a court will divide only the part that qualifies as community property.
How California Courts Divide Retirement Accounts
Once the court identifies the community portion of a retirement account, the next step is to divide it. In most cases, the court aims for a 50/50 split of community assets.
However, that doesn’t mean each account is split down the middle. Instead, the court may consider the total value of all marital assets and divide them in a way that adds up to a fair distribution.
There are a few common approaches:
- Equal division of each account: Each spouse gets half of the community portion of every retirement account.
- Offsetting with other assets: One spouse keeps the full value of the retirement account while the other gets other marital property of equal value.
- Deferred division: In pensions or similar plans, the non-employee spouse receives a portion of future payouts once the account holder begins receiving benefits.
The specific method used can depend on the type of account and the preferences of the parties or the court.
What Is a QDRO and Why Is It Important?
A Qualified Domestic Relations Order (QDRO) is a legal order used to divide certain types of retirement accounts during divorce. You’ll typically need a QDRO to split things like 401(k)s, 403(b)s, and traditional pension plans. IRAs do not require a QDRO, but a similar process involving the divorce decree must be followed.
A QDRO ensures that the non-employee spouse can receive their share of the retirement account directly without triggering early withdrawal penalties or tax consequences for either party. Without a QDRO, the plan administrator may refuse to divide the funds or withhold taxes.
Make sure your attorney prepares a QDRO tailored to your specific plan. Generic orders often result in delays, errors, or lost benefits.
Special Considerations for Military and Government Pensions
Military, federal, and state government pensions have different rules from private accounts. These plans are governed by separate laws and may have specific division requirements.
For example, the Uniformed Services Former Spouses’ Protection Act (USFSPA) allows state courts to treat military pensions as property.
DFAS (the Defense Finance and Accounting Service), however, will only issue direct payments to a former spouse if:
- The couple was married at least 10 years; and
- Those 10 years overlapped with 10 years of creditable military service
Even if you don’t meet the 10/10 rule, the court can still award a share; it’s just that DFAS won’t distribute it directly.
For California state employees with CalPERS or CalSTRS pensions, separate paperwork is required. Your attorney must work with those systems to ensure proper division and payment procedures.
Retirement Division Mistakes To Avoid
Dividing retirement during divorce can be tricky and costly if done wrong.
These are some common errors that can lead to unintended consequences:
- Not filing a QDRO when required
- Failing to specify details in the settlement agreement
- Overlooking survivor benefits in pension plans
- Ignoring tax consequences of withdrawals or rollovers
- Assuming all retirement accounts are equal in value or flexibility
These mistakes can cost tens of thousands in benefits, so it’s strongly recommended that you work with a lawyer who understands retirement asset division.
What Happens to Retirement Accounts After the Divorce?
After the divorce is finalized and court orders are submitted to the plan administrator, each spouse will receive their share of the retirement benefits. What that looks like depends on the type of plan and the terms of the settlement or court order.
You may also need to do things like:
- Update beneficiaries on your accounts
- Create or revise your estate plan
- Adjust your retirement timeline and contributions
In some cases, you may need to work with a financial advisor to reassess your savings goals post-divorce. Losing a portion of retirement savings could mean working longer or changing your investment strategy.
Contact the San Diego Divorce Lawyers at San Diego Divorce Lawyers, APC for Help Today
Your retirement accounts represent years of hard work and planning, and a divorce doesn’t have to mean losing them. However, without the right guidance, you could give up more than you should.
A knowledgeable San Diego divorce lawyer at San Diego Divorce Lawyers, APC can help you understand your rights, evaluate your retirement assets, and create a plan that preserves your financial security. No matter if you’re dividing a pension, 401(k), or IRA, getting legal help early may be in your best interest.
Contact our experienced San Diego divorce lawyers at San Diego Divorce Lawyers, APC, today for legal assistance. Contact us at (619) 866-3756 to schedule a complimentary case evaluation.
We proudly serve throughout San Diego County. We are located in San Diego, California.
San Diego Divorce Lawyers, APC
2851 Camino del Rio S #430
San Diego, CA 92108
(619) 866-3756
