Dividing Retirement Accounts in Divorce
Split by the statement, what is each spouse's share actually worth after tax? Every piece below can be linked to, so it opens in a window on your reader's screen, current as of the record. No form to fill in.
2026 law · Reviewed September 7, 2026 · The full page, with methodology and sources · the terms · All tools
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The pre-tax, Roth, and brokerage balances, the split, and each spouse's rates in; each side's after-tax value and the gap out. In a frame it carries no cookies, no tracking, and a visible link back to the methodology. Your site has to allow frames; most do. The link that opens it in a small window is on the professionals page.
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- 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.
The facts
Six quotable sentences on dividing retirement accounts.
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- A transfer of property between spouses incident to a divorce is not a taxable event, and the recipient takes the transferor's basis (§ 1041): the tax travels with the asset, so a dollar in a pre-tax account is not a dollar.
- An IRA is divided by a transfer under the divorce instrument; the recipient's share becomes the recipient's own IRA, taxed and penalized under the ordinary rules from then on (§ 408(d)(6)).
- A 401(k) or pension is divided by a qualified domestic relations order, a court order the plan must honor (§ 414(p)). A distribution to the former spouse under that order is exempt from the 10 percent early-withdrawal tax (§ 72(t)(2)(C)); the same money moved to an IRA first loses that exemption.
- Example: a $1,000,000 pre-tax account split in half between a spouse in the 35 percent bracket and one in the 12 percent bracket is worth $325,000 to the first and $440,000 to the second after tax, 42% and 58% of the after-tax total.
- A Roth account is worth its face value to either spouse; a brokerage account is worth its value less the tax on its built-in gain, which the recipient inherits with the basis.
- The settlement sheet lists statement balances. The after-tax sheet, at each spouse's own rates, is the one that describes what each will have to live on.
How each account divides
The four account types and what each is worth to the recipient.
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| Account | Divided by | Tax to the recipient | Before 59½ |
|---|---|---|---|
| 401(k), 403(b), pension | Qualified domestic relations order | Ordinary income when withdrawn | No penalty on a distribution under the order (§ 72(t)(2)(C)) |
| Traditional IRA | Transfer under the divorce instrument (§ 408(d)(6)) | Ordinary income when withdrawn | 10% penalty applies to the recipient |
| Roth IRA or Roth 401(k) | Transfer or order | None, if qualified | Contributions free; earnings and young conversions penalized |
| Brokerage account | Transfer (§ 1041), basis carries over | Capital gain on the built-in gain when sold | No penalty |
Cite and link.
The clean address, a citation generated from the record so it can never carry a stale review date, and an address for every section so you can point a reader at the exact table or method.
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- Link
- https://consideratecapital.com/tools/dividing-retirement-accounts-in-divorce
- Citation
- Considerate Capital, "Dividing Retirement Accounts in Divorce," reviewed September 7, 2026, https://consideratecapital.com/tools/dividing-retirement-accounts-in-divorce.
Link to a section
- The calculator https://consideratecapital.com/tools/dividing-retirement-accounts-in-divorce#calculator
- The facts https://consideratecapital.com/tools/dividing-retirement-accounts-in-divorce#facts
- How each account divides https://consideratecapital.com/tools/dividing-retirement-accounts-in-divorce#key-numbers
- How the split works https://consideratecapital.com/tools/dividing-retirement-accounts-in-divorce#how-it-works
- Methodology https://consideratecapital.com/tools/dividing-retirement-accounts-in-divorce#methodology
- Sources https://consideratecapital.com/tools/dividing-retirement-accounts-in-divorce#sources
- Revision history https://consideratecapital.com/tools/dividing-retirement-accounts-in-divorce#revision-history
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