Why Do I Have to Divide My Retirement Savings if I Get Divorced?

 Posted on April 29, 2025 in Divorce

If you are getting a divorce, the idea of splitting your hard-earned retirement savings with your spouse might feel frustrating and even unfair – especially if your spouse did not work as hard as you have or did not work at all. You may have spent decades contributing to a 401(k) or pension, only to find that it is now considered marital property and your spouse is likely to walk away with a significant portion. In Illinois, this outcome is not unusual.

Understanding why complex financial issues like dividing retirement savings are such a major part of divorce can help you approach the process more strategically. Our Chicago asset division attorney understands your frustrations and can work with you to ensure your financial future is protected as fairly as possible.

Why Are Retirement Accounts Considered Marital Property?

Under Illinois law, most property acquired during the marriage is considered marital property — including retirement savings. That may not seem fair if you were the one earning the money, but that is the law. This is true even if the account is in your name only. The reason for this is that both spouses contribute to the marriage in different ways, and the law views long-term savings as part of the shared financial picture.

Retirement funds are typically subject to division if:

• Contributions were made during the marriage

• The account increased in value during the marriage

• The couple does not have a valid prenuptial agreement stating that the funds would be managed in any other way

Only the portion of the account accumulated during the marriage is subject to division, however. Any funds you saved before the wedding may be considered separate property and remain yours, but you will need documentation to support that.

How Is the Division of Retirement Accounts Handled?

Illinois uses a principle called "equitable distribution," which means that assets are divided fairly, though not always equally. Obviously, "fairly" can be a subjective term that means different things to different people. So how will you know that a judge will actually make a decision that feels fair to you? 

Unfortunately, you cannot know this for sure, and the real hitch is that judges actually do not end up making these decisions all that often. Courts prefer divorcing couples to work out these issues on their own – not only because it saves everyone including the court time and money, but because once a divorce is finalized, people are more likely to be content with the outcome if they had a role in negotiating it. 

However, when spouses really cannot agree on the terms of their asset division, the court will need to get involved. The court will consider a variety of factors, including each spouse’s income, the length of the marriage, and future earning potential when making decisions. Spouses will have the opportunity to present their perspectives and argue in favor of why their preferences should be respected. 

In many cases, retirement accounts are divided using a special court order called a QDRO (Qualified Domestic Relations Order). This allows funds to be transferred without tax penalties. Instead of dividing retirement accounts, some couples may agree to offset the division of retirement assets by trading other assets, such as home equity or investment accounts.

How Can a Lawyer Help with Asset Division During Divorce?

Dividing retirement savings requires careful planning. An attorney can help you:

• Identify which parts of your accounts are marital versus separate property

• Work with financial professionals to evaluate the long-term value of a retirement plan

• Create a strong argument on your behalf as to why you deserve the greatest share of retirement assets possible

• Negotiate a settlement that protects your interests

• Prepare court orders to carry out the division legally and efficiently

Contact a Cook County, IL Divorce Attorney

If you are facing divorce and concerned about protecting your retirement, speak with the Skokie, IL family law attorney at The Law Offices of Curtis Bennett Ross, L.L.C.. Call 312-984-1514 to schedule a free limited consultation and learn how we can help you reach a fair and secure outcome.