How is Retirement Income or Pensions Divided in a Gray Divorce?

January 24, 2026

Divorce later in life, often referred to as a “gray divorce,” can bring unique financial and emotional concerns. One of the most significant questions for couples splitting up later in life is: what happens to retirement income and pensions built up over decades of marriage? Below we explain how retirement and pension benefits are handled under Virginia law, and what steps divorced couples should take to ensure everything is divided fairly.

Virginia Laws on Property Distribution

In the Commonwealth of Virginia, retirement accounts and pension plans are treated similarly to other marital assets. Under Virginia Code § 20‑107.3, property acquired during the marriage is generally considered marital property, regardless of whether it is titled jointly or solely in one spouse’s name.

That means retirement accounts, pensions, 401(k)s, IRAs, and other deferred-compensation plans accumulated during the marriage are subject to “equitable distribution”, not an automatic 50/50 split, but rather a division a court deems fair based on factors such as each spouse’s contributions, the length of the marriage, income and earnings, future retirement needs, and more.

However, not all funds in a retirement account are necessarily marital property. Contributions made prior to the marriage, or funds acquired by gift or inheritance during the marriage (if kept separate), may be deemed separate property and thus excluded from division.

How Are Retirement Accounts and Pensions Actually Divided

When retirement funds or pension plans are to be divided, either as part of spousal support, alimony, or property settlement, a court-approved order is usually required. For most private retirement plans governed by federal law (under Employee Retirement Income Security Act, ERISA), that order is a Qualified Domestic Relations Order (QDRO). The QDRO outlines exactly how much of the retirement fund or pension goes to each spouse (or other alternate payee).

For public-sector or military pensions, different procedures apply: for example, a military pension may be divided under the Uniformed Services Former Spouses’ Protection Act (USFSPA).

For defined-contribution plans (like 401(k)s or IRAs), a QDRO (or equivalent order) establishes the portion of contributions earned during marriage that the non-participant spouse is entitled to. Often that amount is set at 50% of the “marital share,” but courts can, and often do, adjust when fairness requires a different proportion.

For defined-benefit pensions, there are generally two main approaches:

Lump-sum valuation now: The pension’s present value can be calculated (often with the help of an actuary) and included in the overall pool of marital assets, to be divided then and there.
Deferred distribution at retirement: The parties may agree that the pension benefits will be split when the pension holder retires and begins receiving payments. The QDRO (or equivalent order) will specify the alternate payee’s share when the benefits are distributed.

Why “Gray Divorce” Makes This Especially Important

In a gray divorce, where couples are often closer to retirement, dividing retirement and pension assets is critical: those assets might represent the bulk of a spouse’s future income. Because retirement funds might have been accumulating for decades, the value at stake can be substantial, and even small percentage differences can dramatically affect the financial security of both parties.

Additionally, timing matters: a deferred-distribution approach may leave one spouse waiting many years for payments, potentially creating cash-flow or budgeting challenges in the interim.

How a Divorce Attorney Can Help

At Culin, Sharp, Autry & Day P.L.C., our attorneys understand the complexities involved in dividing retirement benefits, especially in late-life or high-asset marriages. We can help you:

Determine which retirement assets are marital vs. separate property,
Value pensions or retirement accounts correctly,
Draft and secure the proper domestic relations orders (such as a QDRO, or an alternate order for public/military pensions), and
Ensure that future distributions, lump sum or deferred, are structured to protect your financial future.

If you’re facing a gray divorce and retirement income or pension benefits are part of the equation, we encourage you to reach out to our experienced Northern Virginia family law team.