What Happens to Retirement Assets in a Divorce?

 Posted on September 15, 2025 in Property Division

Over the course of your marriage, you may have made significant contributions to a retirement account. If you are contemplating divorce or you have been served with divorce papers, you may wonder how it will affect what you have saved up. When you are faced with these concerning questions, a skilled Glen Ellyn, IL gray divorce lawyer can help to protect your best interests.

At Roberts PC, we believe in the value of strategic planning during divorces. Our lawyers will pursue a solution that preserves your plans for the future and minimizes any potential losses. With over 40 years of cumulative experience, our firm is well-versed in Illinois divorce law, so you can trust us to handle your case with care.

Are Retirement Contributions Considered Marital Assets?

In Illinois, all of the assets and property you acquire during the marriage, with some exceptions, are considered marital property (750 ILCS 5/503). This includes your income, as well as contributions you make to a retirement account, such as your pension, 401(k), IRA, or 403(b).

When your divorce goes to court, the judge will divide up your assets based on what is fair to both parties. Note that this does not mean that you will have to give your spouse half of your retirement assets. In many situations, it may be more advisable to pursue an alternative settlement, as this gives you and your spouse greater control over how you want to split up your retirement assets, if at all.

Do I Have to Divide Up Retirement Assets in a Divorce?

As previously stated, the courts prioritize equitable outcomes when it comes to asset division. If you are willing to compensate your spouse with other equivalent assets, you may not have to divide up your retirement savings. If you do not want to give up your retirement savings, our attorneys may be able to help you negotiate with your spouse to reach a different agreement with other marital assets. 

Are There Penalties For Withdrawing Retirement Assets Early?

Dividing up retirement assets during a divorce tends to be complicated due to the penalties for early withdrawal. You cannot simply transfer the funds from one account to another, as this will incur a 10 percent penalty, which can entail the loss of several thousand dollars. Withdrawing the funds early will also trigger income taxes. 

Fortunately, there is a way around this. A Qualified Domestic Relations Order, or QDRO, can be used to safely transfer retirement assets from a 401(k), pension, or other retirement account by instructing the plan administrator directly. Seeking a QDRO is a complicated process best done with the help of an attorney. Our firm can guide you through the required steps to preserve your best interests.

Contact a Wheaton, IL Gray Divorce Lawyer

Your retirement assets should be handled with care in your divorce. At Roberts PC, we understand the immense financial pressure that can come with a dissolution of marriage, and we will work hard to safeguard your hard-earned savings. Call our offices at 630-668-4211 or contact our Glen Ellyn, IL asset division attorneys online for a free consultation.