A recent MarketWatch column addresses a common retirement question. A reader asked whether he must split his retirement savings 50/50 with his wife. She stopped working for 14 years to raise their children.
The reader noted he worked every morning during that period. He described his wife as free to pursue her own interests. The question raises legal and financial issues that vary by state and individual circumstances.
Retirement savings are often considered marital property. In most states, assets accumulated during a marriage get divided upon divorce. This includes 401(k) plans, pensions, and individual retirement accounts.
However, a 50/50 split is not automatic. Courts consider factors such as the length of the marriage and each spouse’s contributions. Non-financial contributions, like raising children, carry legal weight in many jurisdictions.
The reader’s situation is not unusual. Many families have one spouse who leaves the workforce to handle caregiving. That decision can affect both partners’ long-term financial security.
State law determines how retirement funds get divided. Community property states generally split marital assets equally. Equitable distribution states aim for a fair, though not necessarily equal, division.
A prenuptial or postnuptial agreement can change the outcome. Without one, the default rules of the state apply. Consulting a family law attorney provides clarity for specific cases.
