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How to Calculate a Divorce Settlement Retirement Amount

author image Mike Broemmel
Mike Broemmel began writing in 1982. He is an author/lecturer with two novels on the market internationally, "The Shadow Cast" and "The Miller Moth." Broemmel served on the staff of the White House Office of Media Relations. He holds a Bachelor of Arts in journalism and political science from Benedictine College and a Juris Doctorate from Washburn University. He also attended Brunel University, London.
How to Calculate a Divorce Settlement Retirement Amount
A woman is signing a divorce settlement. Photo Credit: BernardaSv/iStock/Getty Images

Marital property subject to division between spouses in a divorce case often includes all or part of a retirement account or plan, according to "The Complete Divorce Handbook: A Practical Guide" by Brette McWhorter Sember. Consequently, as you head to or attempt to settle a divorce, you need to understand how to calculate the division of a retirement account or plan as part of a settlement agreement. The manner in which a retirement account or plan is allocated between spouses depends upon whether your state utilizes a community property or equitable division standard, according to Cornell University Law School. Community property requires an even division of assets. Equitable division requires a fair, although not equal, distribution of property.

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Step 1

Obtain a copy of the family law statutes section of division of marital property. The statutory provisions are available through the website maintained by your state's legislature or the American Bar Association.

Step 2

Determine if you live in an equitable division or a community property state. Most states follow the equitable division standard. Less than 10 are community property states, according to "The Complete Divorce Handbook: A Practical Guide."

Step 3

Determine the increase in value of the retirement account or plan during the course of the marriage. Add up employee contributions, employer contributions and interest earned from the date the marriage started until you separated from your spouse. Only this portion of the retirement plan or account is part of the marital assets.

Step 4

Divide the total increase in value evenly between both spouses if you reside in a community property state. Although some deviation from this standard is permissible in a settlement between spouses, the judge reviews the overall agreement to ensure that the asset distribution generally complies with the laws of the state.

Step 5

Divide the total increase in a fair manner between spouses if you live in an equitable division of property state. The use of the fair standard intentionally is vague, according to the American Bar Association Section of Family Law. For example, if both spouses maintain comparable retirement plans, avoiding dividing up each plan can represent the fair and appropriate resolution.

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