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Ways to divide your 403(b) upon divorce

When you decide to end your marriage, there are a lot of issues to address. Those include who gets to continue to be a day-to-day parent with primary custody, who gets to continue to live in the family home and many more. One is the division of your 403(b) retirement plan.

That plan is one of your marital assets. It can be one of the ones you value the most, especially if retirement is close and you've been counting on having it to support yourself after you stop working. You have options regarding what should be done with it.

One option is to keep the retirement plan account active, and set up an agreement whereby one spouse can retain it but the other spouse can withdraw an agreed amount when he or she retires. Alternatively, you can just divide the cash value of the plan so each divorcing party gets the share of it that he or she agrees is fair.

Dividing it doesn't have to mean half for each person's split. One might accept less than 50 percent in order to get a bigger share of other assets. You might also want to roll over a part or all of the value of the 403(b) into the other person's retirement plan. Of course, there may be tax implications for the approach that you choose, so it is important to seek out qualified advice before taking actions.

You may be able to address tax issues by pursuing tax-free transactions with a Qualified Domestic Relations Order. Your attorney could prepare that, and then the administrator of the plan and a judge would need to sign it. Of course, you will want to get expert advice and accurately establish the value of your 403(b) retirement plan so you can make the best decisions.

Source: Newsmax, "7 Tips for Dividing Your 403(b) During a Divorce," Jerry Shaw, May. 04, 2015

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