Divorced After 50: Rebuilding Your Retirement

A **Qualified Domestic Relations Order (QDRO)** is a legal order that divides retirement accounts in divorce without triggering taxes or penalties.

• **What it covers:** 401(k), 403(b), pensions, and other employer plans
• **How division works:** Court determines your share (often 50% of marital portion)
• **No early withdrawal penalty:** QDRO transfers are penalty-free
• **Rollover option:** You can roll your share into your own IRA
• **IRAs different:** IRAs don't need QDRO - transferred through divorce decree

If you were married 10+ years, you may be entitled to benefits on your ex's record:

• **10-year rule:** Must have been married at least 10 years
• **Amount:** Up to 50% of your ex's full retirement benefit
• **Your benefit vs. ex's:** You get the higher of your own or divorced spouse benefit
• **Doesn't reduce ex's:** Your claim doesn't affect their benefit at all
• **Must be unmarried:** If you remarry, you lose divorced spouse benefits
• **Age requirements:** Must be 62+ to claim; full benefit at your FRA

Divorced at 50+ means you have 10-15 years to rebuild. Here's your playbook:

• **Max catch-up contributions:** $8,000/year to IRA, $7,500 extra to 401k at 50+
• **Delay retirement:** Each year of work adds savings AND increases Social Security
• **Downsize housing:** Smaller home = lower costs = more to save
• **Delay Social Security:** 8%/year increase for waiting past full retirement age
• **Consider working spouse benefits:** If ex earns more, plan around their record
• **New employer 401k:** Prioritize jobs with good retirement benefits

Emotional decisions during divorce often hurt long-term finances:

• **Fighting for the house:** Often better to sell and split - houses need maintenance
• **Ignoring tax implications:** A $500k 401k is worth less than $500k cash after taxes
• **Rushing decisions:** Take time to understand all financial implications
• **Not updating beneficiaries:** Your ex may still be listed on accounts
• **Revenge spending:** Emotional purchases undermine rebuilding
• **Ignoring the QDRO:** Failure to file properly can cost you your share

Follow this sequence to protect and rebuild:

1. 1**Immediately:** Get copies of all retirement account statements
2. 2**During divorce:** Ensure QDRO is properly drafted by a specialist attorney
3. 3**At finalization:** File QDRO with plan administrators, update beneficiaries
4. 4**Within 60 days:** Decide to roll over QDRO funds or leave in ex's plan
5. 5**First year:** Create new budget, max retirement contributions
6. 6**Ongoing:** Review and adjust plan annually as you rebuild