Select Page

The other half of the estate

Retirement accounts and the house are not the same dollars.

In a long marriage the retirement accounts and the house are usually the two biggest assets, and people trade them against each other all the time. Before you do, value both after tax. Then get the retirement orders done with the decree, not after.

Gray divorce in ColoradoKeep the house

Call or text 303-955-4220. A live person answers. Not a robot, not a phone tree.

After tax

$300k 401(k) ≈ $221k

Pre-tax dollars are worth less than home equity inside the tax exclusion. Do not trade them one for one.

The order

QDRO for plans, decree for IRAs

No QDRO means tax and a 10 percent penalty on a 401(k) split. IRAs transfer on the decree.

Colorado PERA

90 days, or it can be lost

PERA needs its own signed order within 90 days of the decree. Courts have upheld late-order rejections.

Social Security

10 years to the decree date

Married 10+ years, unmarried, 62+: up to 50 percent of the ex’s benefit if it beats your own.

The short answer

Retirement earned during the marriage is marital property in Colorado and is divided equitably like everything else. Employer plans (401(k), 403(b), pensions) are split by a Qualified Domestic Relations Order; IRAs transfer under the decree; Colorado PERA uses its own order with a 90-day deadline. Value pre-tax accounts after tax before trading them for the house. Check the marriage length against the 10-year Social Security rule.

The after-tax problem, with numbers

She keeps $300,000 of home equityWithin the $250,000 exclusion after about 7 percent selling costs, she nets about $279,000 when she eventually sells.
He keeps $300,000 of traditional 401(k)At 22 percent federal plus 4.4 percent Colorado, it is worth about $221,000 after tax when withdrawn.
The gapAbout $58,000 on a split that looked equal. A CDFA or CPA fixes this with a tax-affected valuation before the agreement is signed.
The other sideEquity is illiquid and carries a mortgage, upkeep and market risk; the 401(k) keeps growing tax-deferred. Neither is better. They just have to be valued the same way.

How each account is divided

401(k), 403(b), TSP

A QDRO tells the plan administrator how much goes to the alternate payee. Rolled to an IRA, there is no tax or penalty. Taken as cash directly from the plan under the QDRO, income tax applies but the 10 percent early-withdrawal penalty does not, even under 59½. Pre-tax and Roth balances are split separately.

Pensions (defined benefit)

The marital share is usually a percentage of each payment when the pension starts, set by a QDRO, or the present value is calculated by an actuary and offset against other assets. Survivor benefits have to be addressed in the order or they can be lost.

IRAs

No QDRO. The decree or agreement directs a transfer incident to divorce; the custodian moves the money into an IRA in the recipient’s name with no tax.

Colorado PERA

Teachers, state employees and many local-government workers. PERA uses its own model domestic relations order, signed by the judge and delivered to PERA within 90 days of the decree. Late orders have been rejected and the rejections upheld. Draft it with the decree.

Social Security after a long marriage

  • Divorced-spouse benefit: married 10 years or more measured to the date of the decree, currently unmarried, 62 or older, and your ex is entitled to benefits (or you have been divorced two years). Up to 50 percent of the ex’s full benefit at your full retirement age (67 for people born in 1960 or later); about 32.5 percent if claimed at 62. You get it only if it beats your own benefit. It does not reduce the ex’s benefit or their current spouse’s, and they are not notified.
  • Survivor benefit: up to 100 percent of the ex’s benefit if the marriage lasted 10 years and you are unmarried or remarried after 60.
  • Earnings test: $24,480 in 2026 if you claim before full retirement age and keep working.
  • The nine-year trap: nine years and eleven months qualifies for nothing. If the marriage is close to 10 years, the decree date matters and attorneys sometimes time it.

Questions people ask on this page

Is my spouse entitled to my retirement if I earned it?

The part earned during the marriage is marital property in Colorado regardless of whose name it is in. The part earned before the wedding is separate, but its growth during the marriage is marital.

Can I take money out of my 401(k) to buy out the house?

Under a QDRO, the alternate payee (the spouse receiving the share) can take a cash distribution without the 10 percent penalty, though income tax applies. The account owner cannot; they would owe tax and, under 59½, the penalty. Plan the buyout source before the decree.

How long does a QDRO take?

Commonly 60 to 180 days from decree to funded account, because the plan has to review and approve the order. A house closing should never depend on QDRO cash arriving by a date.

What about life insurance and long-term care policies?

Cash-value life insurance is marital property; term policies are not, but the decree often requires one to secure support. Long-term-care policies with shared benefits may need to be split or replaced; ask the carrier before the decree.

Cover of Gray Divorce in Colorado: Divorce After 50, the House, the Pension and What Comes Next

Gray Divorce in Colorado: Divorce After 50, the House, the Pension and What Comes Next

The short guide written for this page. Free, 6 pages, plain English, Colorado numbers. Fill in your name, email and phone and the PDF opens right away. Only Damon Chavez and Brian Burke see the form.

Download the free guideFree · discreet · no obligation
General information, not advice. Social Security, Medicare, tax and retirement-plan rules are federal and change yearly; Colorado PERA and property-tax rules are state. We are a real estate team. Confirm anything that matters to you with a CPA, a financial planner, the plan administrator or the Social Security Administration before you rely on it.

Where to go next

Plain-language education, not advice. Divorce Decisions is published by The Kenna Real Estate Group at Keller Williams DTC, a real estate team. Nothing here is legal, tax, lending or financial advice, and reading it does not create any professional relationship. Colorado law and lender rules change; confirm anything that matters to your case with a licensed Colorado attorney, a tax professional, and your lender. See our full disclaimer.

Call your Colorado divorce agent

Questions about the house, the deed or the decree?

Call us today to talk through your situation and how we can help. A live person answers. Not a robot, not a phone tree.

Call today 303-955-4220Download the free divorce-home guide

Ask us about the house

Tell us where you are in the process and what you are trying to figure out. We will answer honestly, including when the honest answer is to wait. Free, confidential, and nobody sells you anything.

Call or text 303-955-4220

A live person answers. Not a robot, not a phone tree. Prefer email? homes@kennarealestate.com

May we contact you about this? (Yes or No)

Your privacy here. Nothing on this site is logged to an account, and this page works the same whether you are reading together or alone. If you send a form, your information stays with two people, Damon L. Chavez and Brian Lee Burke: we never share it and we never sell it. We contact you only if you answer Yes above. Answer No and you still get what you asked for, and nobody calls, texts or emails you. If you answer Yes, expect one text or call to offer a time to talk; reply STOP at any time and that is the end of it.

Ready to sell or buy? Kenna Real Estate Group handles the house.

Call or text 303-955-4220. A live person answers.

BBB Accredited Business, A+ ratingBBB AccreditedA+ RatingGoogle Reviews283 five-starZillow Premier AgentZillowPremier AgentsEqual HousingOpportunityKeller Williams DTCLicensed brokerage
303-955-4220

A live person answers. Not a robot, not a phone tree.

The houseThe Colorado processGray divorceVirtual workshopDivorce realtorsProfessionals: join the panelFAQsContact
CallTextFree guide