How is a retirement account valued at the time of divorce?

By Arin Fife
May 09, 2017
How is a retirement account valued at the time of divorce?

There are a couple of ways to value these accounts and that really depends on what type of plan it is. A defined contribution plan is much easier to value and therefore easier to divide within the divorce. The defined contribution plan has a certain value as of a certain date, which can be divided as either a percentage or a dollar amount to the other spouse.

A defined benefit plan is valued as a future stream of payment based on a benefit formula. Most defined benefit plans are pension plans, which will not pay a lump sum amount and will only pay a spouse on a monthly basis for a lifetime starting around retirement age. The actual value is usually unknown until that benefit begins on that later date.


Arin Fife is a family lawyer at Boyle Feinberg, P.C. in Illinois. To learn more about the firm, visit www.bffamlaw.com. Visit their firm profile here.

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May 09, 2017
Categories:  FAQs

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