Dividing Retirement Accounts in Divorce
§§ 1041, 408(d)(6), 414(p) · reviewed September 7, 2026
Shows what each spouse's share of the retirement and investment accounts is worth after tax, at each spouse's own tax rate. AboutLess
In plain words. When a couple divides their accounts in a divorce, the settlement usually lists the balances on the statements. But a dollar in a pre-tax 401(k) will be taxed when it comes out, a dollar in a Roth will not, and a dollar in a brokerage account carries tax on its built-in gain. And the spouse in a higher tax bracket loses more of every pre-tax dollar. This tool takes the accounts, the split, and each spouse's rates, and shows what each side really receives.
Why it matters. An equal split of pre-tax money between spouses with different incomes is not an equal split. Seeing the after-tax figures is how the settlement gets adjusted, or how one spouse chooses the Roth over the 401(k).
An example. A $1,000,000 pre-tax account split in half, one spouse in the 35 percent bracket and the other in the 12 percent bracket: about $325,000 to the first after tax and about $440,000 to the second, from what looked like $500,000 each.
Where it stops. The rates are yours to set, and future rates are unknown. It does not value a pension's income stream, which needs an actuary, or cover state tax. A 401(k) divided by court order can be tapped without the early-withdrawal penalty; an IRA cannot, and that difference is worth knowing before the order is drafted. Everything it leaves out.
401(k)s, traditional IRAs, and the lump-sum value of any pension, added together. Withdrawals from these are taxed as income.
Roth IRAs and Roth 401(k)s. Withdrawals from these are tax-free.
Regular investment accounts, at today's value.
What was originally paid for the investments in them. The difference from today's value is the gain that is taxed when they are sold.
The tool splits every account by the same share. Your spouse receives the rest.
The rate you would pay on withdrawals from the pre-tax accounts. Brokerage gains are taxed at 0, 15, or 20% depending on the bracket.
The rate your spouse would pay on the same withdrawals.
- Tax owed on your share when withdrawn
- $185,000
- $175,000 on the pre-tax accounts and $10,000 on brokerage gains
- Tax owed on your spouse's share when withdrawn
- $60,000
- $60,000 on the pre-tax accounts and $0 on brokerage gains
- Roth balance, with no tax left to pay
- $200,000
- Worth the same to either of you. Every dollar is spendable.
A 401(k) is split by a court order called a qualified domestic relations order. Cash taken straight from the plan under that order is free of the 10% early-withdrawal penalty, though income tax still applies. The same money rolled into an IRA first loses that exception. A spouse who needs cash right away can take it from the plan under the order and roll over the rest.
This follows the federal rules for dividing accounts in a divorce, under which the transfer itself is not taxed and the receiving spouse takes over the original cost basis. It uses the tax brackets you enter, sets the gains rate from the bracket in a simple way, and applies the same share to every account. It leaves out a pension paid as monthly income, state tax, the 3.8% surtax on investment income, and future changes in tax rates. Educational, not advice, and not a substitute for the order an attorney drafts.
This is a simplified model, not your actual tax return or plan. It only knows what you type in, leaves out rules that may apply to you, and cannot weigh the other facts and trade-offs a real decision depends on. Before you act, talk with a professional who knows your whole situation.
Educational only, not investment, tax, or legal advice. Results are hypothetical estimates that vary with each use and over time and are not guaranteed accurate or complete. Using this tool creates no client relationship with Considerate Capital, and the site that linked here is not affiliated with it. By using it you agree to the tool terms.