Will a Divorce Ruin My Retirement Plans?

 Posted on June 11, 2025 in Divorce

Divorce is not just an emotional transition, but a financial turning point that can reshape your future. For many people, one of the biggest concerns is whether years of retirement savings will vanish in the process. 

If you have spent decades planning for your golden years, the thought of dividing those hard-earned assets can be deeply upsetting. Whether you are approaching retirement or already living on a fixed income, a DuPage County, IL divorce lawyer can help you understand how Illinois law handles retirement accounts during divorce.

What Happens to Retirement Accounts in a Divorce?

In Illinois, retirement accounts are typically considered marital property if contributions were made to them during the marriage. Under the Illinois Marriage and Dissolution of Marriage Act, marital property is divided equitably and fairly, not necessarily equally.

Even if a retirement account is in only one spouse’s name, any portion accumulated during the marriage is generally subject to division. This includes 401(k)s, IRAs, pension plans, and other retirement benefits.

Will I Lose Half of My Retirement Savings?

The court will evaluate several details before dividing assets. Factors such as the length of the marriage, the standard of living established, each spouse’s income, and any prenuptial agreements will influence how assets are divided. In some cases, one spouse may keep more of the retirement funds in exchange for giving up other marital assets.

Negotiated settlements also play a significant role. With the right legal and financial advice, you may be able to reach an agreement that protects a substantial portion of your retirement savings.

How Are Retirement Accounts Divided?

The division of retirement accounts is often done using a Qualified Domestic Relations Order (QDRO). A QDRO is a court-approved document that allows for the division of certain retirement plans, such as 401(k)s and pensions, without triggering taxes or penalties.

For IRAs, a QDRO is not needed, but proper procedures must still be followed to avoid tax consequences. Working with a lawyer and financial advisor during this process is crucial to protecting your best interests and ensuring the division is handled correctly.

Can Spousal Support Affect My Retirement?

If you are required to pay spousal maintenance, it may reduce your ability to contribute to retirement accounts or delay your retirement timeline. On the other hand, if you are receiving support, it could help you meet financial needs during retirement. However, this is typically not a viable long-term solution.

What Can I Do to Protect My Retirement?

Taking a proactive approach is key to safeguarding your retirement savings. If you are pursuing a divorce, consider:

• Consulting a divorce attorney with experience in financial matters

• Gathering account statements and documentation of all retirement assets

• Working with a financial advisor to understand your post-divorce needs

• Negotiating a fair settlement that aligns with your retirement goals

Careful planning and legal guidance can help you preserve your retirement and maintain financial independence after your divorce.

Schedule a Consultation with a Will County, IL Divorce Lawyer

Are you worried about how divorce will affect your retirement? A Naperville, IL complex divorce attorney can help you navigate asset division and understand your rights. Contact Law Office of Ronald L. Hendrix, P.C. by calling 630-355-7776 to schedule a free consultation and discuss your next steps.