Many married couples in Plymouth spend years saving for retirement. They may have 401(k)s, IRAs, pensions, and other investments that they have set aside to allow them to live comfortably once they stop working. However, not every marriage is meant to last. Sometimes couples — even those who have been married for decades — decide to divorce.

When a younger couple divorces, child custody and child support may be major issues to them. However, if a couple’s children are grown, these issues aren’t present in a divorce, meaning that a greater focus may be on property division — specifically, how to divide the retirement assets they have spent so many years accumulating.

Some couples may decide that they simply want to divide their retirement assets evenly between them. However, for your ex to receive a portion of your 401(k), a qualified domestic relations order needs to be obtained. QDROs are judicial orders stating that your ex has a right to all or part of the retirement asset at issue. If the funds are rolled directly into a newly established IRA, then no taxes or penalties will be levied on the transaction.

There may be special rules for dividing a pension, so it is important to understand what those rules are before making any decisions regarding the division of a pension plan. In addition, QDROs are not applicable to IRAs. To divide an IRA, the parties’ divorce decree must contain the specific terms of the division of this account, and the decree must be delivered to the IRA custodian. Failing to obtain a QDRO and otherwise abide by the rules can lead to significant penalties.

As this shows, not all retirement plans can be divided in the same manner. There are different rules for the various retirement assets at issue. Since retirement funds are often some of the most valuable assets a person has, and the division of these funds can affect a person for years to come, it is important that couples understand all their options when it comes to retirement assets and divorce.