Dividing Retirement Accounts in a Gray Divorce: QDROs, IRAs, Pensions, and Social Security

By age 70, most retirement assets are decades old, and the rules for splitting them in divorce are different than the rules for splitting a regular brokerage account. Get this part wrong and you may owe tens of thousands in unnecessary taxes or lose the right to a pension share that should have been yours.

The single most important document in retirement-account division is the Qualified Domestic Relations Order, called a QDRO (pronounced quad-row). A QDRO is a court order that tells a 401(k), 403(b), or pension plan how to split the account between two ex-spouses. Without a QDRO, the plan administrator legally cannot release any portion to the non-account-holder spouse. The IRS confirms this in Publication 575. A divorce decree alone is not enough — the QDRO is a separate, additional document that has to be drafted, signed by the judge, and accepted by the plan administrator.

QDROs only apply to employer-sponsored plans (401(k), 403(b), pension, thrift savings plan). They do not apply to IRAs. IRAs are split using a different mechanism called a transfer incident to divorce, which is described in IRS Publication 590-A. The IRA custodian (Fidelity, Schwab, Vanguard, etc.) moves the agreed-upon portion directly from one spouse's IRA to a new IRA in the other spouse's name. No tax is owed at the time of transfer because it is a direct trustee-to-trustee movement, not a withdrawal. Get the wording in the divorce decree right or the IRS will treat it as a taxable distribution.

Pensions are the trickiest piece. Many adults over 70 have a pension from a long career, and pensions come in two flavors: still-working (rare at this age) and already-in-pay-status (common). A pension that is already paying monthly checks can be divided in one of three ways. Shared payment splits each monthly check between the two ex-spouses. Separate interest carves out the ex-spouse's share into a separate stream that is paid for the ex-spouse's lifetime, not the original retiree's. Lump-sum buyout offers a one-time cash payment in exchange for giving up the future monthly stream. Each option has different tax and longevity implications. NAELA-listed elder attorneys handle these regularly.

Social Security is not divided by QDRO or by court order. The Social Security Administration (SSA) handles it directly under federal rules. If you were married 10 years or longer and you are at least 62 and unmarried, you can claim a divorced-spouse benefit of up to 50 percent of your ex's full retirement age benefit. The SSA pays this in addition to your ex's regular benefit — your claim does not reduce theirs by one penny. You do not need their permission, signature, or even notification. You can apply at ssa.gov or by calling 1-800-772-1213.

Required Minimum Distributions (RMDs) add a wrinkle for older divorces. If you are over 73, the IRS requires you to take a minimum amount out of traditional retirement accounts each year. After a divorce that splits these accounts, both ex-spouses will have their own RMD calculations going forward. A CDFA-certified financial planner is the right professional to model out post-divorce RMD requirements for both sides. The math matters because the wrong split can push one spouse into a higher tax bracket for the rest of their life.

(Sources: IRS Publication 575 (Pension and Annuity Income); IRS Publication 590-A (Contributions to IRAs); IRS Topic 412 (Lump-Sum Distributions); SSA Divorced Spouse benefits page; NAELA practice resources, accessed May 2026)