Retirement Planning / Women’s Retirement Insights / Divorce
Women’sRetirement InsightsA divorce settlement can shape your retirement for the rest of your life. Learn how retirement accounts are divided in Florida, what you may be entitled to from Social Security, and how to rebuild a confident plan on one income.
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Divorce after 50, often called gray divorce, has become far more common. It usually happens when retirement savings are at their largest and the years left to rebuild are at their fewest.
Studies consistently find that women’s household income falls more than men’s after a divorce, and the effect is larger for women who stepped back from their careers to raise a family. That is why the decisions you make in the settlement, not just the divorce itself, matter so much.
The goal is not simply an equal split on paper. It is a settlement that supports a secure retirement for you.
Florida is an equitable distribution state. Retirement savings built up during the marriage are generally marital property, and the division usually starts from an equal split. How the money moves depends on the type of account.
| Account type | How it is divided | Watch out for |
|---|---|---|
| 401(k), 403(b), TSP | A QDRO (a court order the plan approves) transfers your share into an account in your name. The TSP uses a similar court order. | Money taken out under a QDRO avoids the 10% early withdrawal penalty, but not income tax. Roll over what you do not need. |
| Traditional or Roth IRA | No QDRO needed. A transfer incident to divorce, written into the decree, moves your share tax free. | There is no penalty exception for IRAs. Never take the money as a check first. |
| Pension | Divided by QDRO, either as a share of each monthly payment or as a separate benefit for you. | Ask for survivor benefit rights, or your payments could stop if your ex dies first. |
| Military retirement | Divided under federal law, with direct payment from DFAS if you were married 10 years during 10 years of service. | Survivor Benefit Plan coverage must be elected within strict deadlines. |
| Annuities | Often split by a tax-free exchange into a new contract in your name, depending on the contract terms. | Surrender charges and lost living benefit riders. |
General education only. Your attorney drafts the settlement and court orders; we help you understand what the numbers mean for your retirement.
These are the questions we help women answer before a settlement becomes final.
Include 401(k)s, IRAs, pensions, deferred compensation, stock options, annuities, cash value life insurance, HSAs and brokerage accounts, with recent statements for each.
Pre-tax, Roth and taxable dollars are not equal. Make sure the settlement compares them on an after-tax basis.
If you are awarded part of a pension, ask whether you keep survivor benefits. Otherwise your share could end when your ex-husband dies.
If you were married close to 10 years, the date the divorce becomes final can decide whether you qualify for divorced spouse and survivor benefits.
If you will receive alimony or child support, a life insurance policy on your ex, with you as owner or beneficiary, protects those payments. Learn more about life insurance.
COBRA can continue coverage through your ex’s employer plan for up to 36 months. Compare it with an ACA marketplace plan, and know your Medicare timeline if you are near 65.
Know what your life will actually cost after the divorce, and test whether the settlement supports it through retirement.
If your marriage lasted 10 years or more, you may be able to collect benefits based on your ex-husband’s work record, and he never has to know.
Up to 50% of your ex’s full retirement age benefit if you were married 10+ years, are unmarried and are both at least 62. If you have been divorced for two years, he does not need to have filed.
If your ex dies, you may receive up to 100% of his benefit. Remarrying after age 60 does not take this away.
Your benefit does not reduce your ex-husband’s benefit or the benefit of his current wife. Several former spouses can each qualify on the same record.
Social Security pays the higher of your own benefit or the divorced spouse benefit. Remarrying generally ends divorced spouse benefits, so talk to us before you remarry. See Social Security optimization.
If you are divorced by December 31, you file as single for the whole year, or as head of household if you pay more than half the cost of a home for a qualifying dependent. Head of household has lower rates and a larger standard deduction.
Florida’s 2023 reform ended permanent alimony for new awards. Bridge-the-gap, rehabilitative and durational alimony remain. For divorces finalized after 2018, alimony is neither deductible nor federally taxable.
The house often feels like security, but it comes with a mortgage, taxes, insurance and repairs on one income. If you sell later as a single owner, generally only $250,000 of gain is tax free, not $500,000.
Florida is an equitable distribution state. Retirement savings built up during the marriage are generally treated as marital property and divided fairly, which usually starts from an equal split. Amounts saved before the marriage may be treated as separate property. How each account is divided, and how it is valued, is set by your settlement agreement or the court, so it is worth reviewing the numbers with a financial planner before you sign.
A Qualified Domestic Relations Order, or QDRO, is a court order that tells a workplace retirement plan such as a 401(k), 403(b) or pension to pay part of the account or benefit to a former spouse. Without a properly drafted and approved QDRO, the plan cannot legally divide the account. IRAs do not need a QDRO; they are divided through a transfer that is written into the divorce decree.
A direct transfer made under a QDRO, or an IRA transfer that is required by the divorce decree, is generally not taxable when it happens. Taxes apply later, when you withdraw the money. One useful exception: money you receive from a 401(k) or similar workplace plan under a QDRO can be taken out without the 10% early withdrawal penalty, even before 59½, although income tax still applies. That exception does not apply to IRAs.
You may qualify if your marriage lasted at least 10 years, you are currently unmarried and you are both at least 62. If you have been divorced for at least two years, you can claim even if your ex has not started his own benefit. You can receive up to 50% of his full retirement age benefit, and claiming it does not reduce his benefit or his new spouse’s. If your ex dies, you may qualify for divorced survivor benefits, and remarrying after age 60 does not take those away.
The 10-year rule is based on the date the divorce becomes final. If you are close to the 10-year mark, the timing of the final decree can affect your lifetime Social Security options. Talk with your attorney about timing before the divorce is finalized.
Sometimes, but it is often an emotional decision more than a financial one. A house comes with a mortgage, taxes, insurance and upkeep on one income, and it does not produce income. Compare it with taking retirement or investment assets instead, and remember that the tax-free gain on a home sale is generally $250,000 for a single owner, compared with $500,000 for a married couple.
No. Florida’s 2023 alimony reform eliminated permanent alimony for new awards. The main types now are bridge-the-gap, rehabilitative and durational alimony, with limits tied to the length of the marriage. For divorces finalized after 2018, alimony is not deductible for the payer or taxable to the recipient on federal returns. Your attorney can explain how the current law applies to you.
Ideally before you sign a settlement. A financial planner can show you how different settlement options affect your retirement income, taxes and cash flow for years to come. We work alongside your divorce attorney and do not give legal advice. Our role is to help you understand what each option means for your future.
Before you sign, book a free, confidential review. We will show you how each option affects your income, taxes and retirement, and work alongside your attorney.
In person in Orlando and Central Florida, or by video anywhere in the U.S.
