Fact or Fiction: Division of Retirement Pay

I feel like I have written about this subject way too much already, but I have received a sudden surge in email and comments about the division of military retirement as a marital asset.  So, let’s talk about some common misconceptions about the law.

Fiction:  The law says how military retirement pay has to be divided in a divorce.

Fact:  The law gives permission for military retirement pay to be divided.  It does not say how it should be divided, or give any formulas or suggested amounts.  This is available for negotiation just like any other asset.  If the two parties can not come to an agreement, it may be decided by the judge as part of the overall property settlement.

Fiction:  The division of retirement pay can be negotiated at any time.

Fact:  Except in very, very rare cases, the division of marital property must be set forth in the divorce decree or the settlement agreement.  I have heard about a very few cases in which a “final” divorce decree has been reopened, but it appears that it is only because the divorce occurred before the provisions of the Former Spouse Protection Act. (USFSPA.)

Fiction:  Department of Veterans Affairs (VA) benefits can be divided.

Fact:  VA disability benefits may not be divided.  However, a good settlement agreement will have provisions to change the division of retirement pay to reflect the way that VA disability benefits reduce military retirement pay.

Fiction:  The division of retirement pay is changed by the remarriage of either party.

Fact:  The division of retirement pay is unchanged by the remarriage of either party.  Look at it this way:  if you decided in a divorce settlement that one person would get the car and one person would get the other car, would that change if either party remarried?  No.  The division of retirement pay is the same way:  it is an asset.

I know this is a hot topic, and it makes some people very upset.  I think a lot of the upset comes from misinformation about the law and what it actually says.  If you have more questions, ask in the comments.

Some good resources for further reading:

Defense Finance and Accounting Service (DFAS) Uniformed Services Former Spouses Protection Act (USFSPAP) Legal Overview

Uniformed Services Former Spouses Protection Overview


About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.
  • ken

    Thanks for the information. Those who are divorcing now, protect your self from joint debt, if not, you might end up with a huge chunk of debt.

  • JohnD

    I would think that the veteran should look at the advantages his spouse got while being attached via marriage to the military! Did she get breaks in college costs? Job preferences? Free medical, any elective surgeries? Trips on Space A flights? Free stuff during the Vet Days times? Free passage to Disney and the rest? Subtract these monies off her chunk of your retirement. Do the totals!

    • Pam

      Yeah, well do these totals, who stayed home twenty four twenty four and took care of your children, your home and explained to the kids why they had no father present???? who took care of the problems on the home front while you were taking care of the country? Don’t under estimate a Military Wife…. she does her part the same as you do…. I served twenty six years right along with my hubby and no we didn’t get a divorce he died in a car accident that took his life and that of our youngest daughter…. he didn’t even have a chance to enjoy what the military had to offer after military service…. his funeral expenses were not even paid for, I had to pay them…. why? because after the loss I could not handle the stress of loosing them both together and still can’t most days I find it hard to do even the barest of every day living… and wasn’t capable of filing the proper papers on my own to get it paid for, before a suspense date….. he gave twenty six years and they gave me two years ….. ironic…. and now I live on what little Social Security will pay me and get no military benefits…. so ladies think long and hard before you become dedicated to being JUST a military mans wife…… I loved it, I love my country, but can’t help but wonder if things had of been different would I not now have a retirement coming in of some kind on him??? I feel my country has let me down….

      • Kate

        Pam, please reach out to a veterans services officer and ensure that you haven’t missed something… Obviously, I don’t know all the details, but something sounds a little off here. {{hugs}}

        • PAM

          Kate first off I want you to know that I thank you so much for responding, I have tried to reach out but all I get is a cold computer on the other end promising me they will call me back… I love my country and I believe in what my husband stood for and why he did what he did for a living… but he believed in the system and all they promised, and got nothing… oh with the exception of a stone on his grave and a botched up military gave side service, don’t get me wrong the reg. military personnel that were there were great there was two of them… but the vets that took part, they were rude and let everyone know they would have rather of been … fishing. you know what I mean, they took no pride in themselves little lone the one and in my case the two they were burying …. and no they did not pick up the tab for any of it I had to. I am an old lady, one that believed her husband when he told her if anything happens to me you will be taken care of….. well where is that care and how can I find it? thank you Kate for being such a sweetheart at least you responded and that means a lot…… PRAY FOR OUR COUNTRY

          • Kate

            I wish that I could come meet with you personally, but please reach out to someone who has experience dealing with these issues and is not hurting as you are. I would hate to see you miss out on benefits because of red tape. I was recently able to help a friend’s mother get the benefits for which she was eligible.

            Most counties and veterans organizations (American Legion, Veterans of Foreign Wars, etc) have Veterans Service Officers who can help you. Please find someone to help!

          • Pam

            Thank you, and I will keep trying… just took his wallet out and found a card that says he is a life time member of the DAV so I am going to take everything to them… I AM GAINING STRENGTH MORE AND M

    • Kate

      Seriously, JohnD?

      • guest

        Sorry, I agree with him. Those are “perks” a spouse got simply for being married. Why shouldn’t they also be considered as marriage assets? A free education, that’s a LOT of money, same with medical.

        • Kate

          So, by your thinking, if I am married to a restaurant employee, and we are allowed to eat there for free once a month, the cost of those meals should be factored into a divorce settlement? Or if I teach at a university that offers tuition remission for family members, and my husband takes classes, he somehow “owes” me?

          These are not benefits being provided by either spouse, but rather by a third-party, and they sure as heck aren’t assets. They have no place in a settlement case.

          In addition, the general principle of divorce law is that you are dividing the marital assets as they stand at the time of the divorce. You’re not looking back, or forward, unless there is some reason to do so. The assumption is that the marriage was functional at one point in time, and that any transfer of money, objects, or benefits is part of the marriage contract.

          Your argument defies logic and legal sensibility.

          • guest

            Except that they are “assets” in that your spouse made a significant investment in your financial future, and life. If he granted you his GI Bill, a benefit HE earned, NOT the spouse, then the spouse divorces him, and he looses the secondary income that HIS investment paid for, why should that investment not be paid back?

            If I am a small business owner, and I provide tuition reimbursement to an employee, most of the time they are required to pay the money back to the owner in the event of termination of services. Why should a spouse be any different?

            If you want to argue that this is horrible, then how can you NOT feel horrible that a service member is FORCED, in many cases, to pay a significant portion of their retirement to an ex spouse…FOR LIFE! How exactly is it fair that I could spend 10 years of my life with my husband, then milk him for his pension for 60 or more regardless of re marriage? In those 10 years he would have provided me with EVERY means of survival, paying my bills, feeding me, providing entertainment etc….he paid for “services” rendered like child rearing and house cleaning, why should he continue to pay when those services are no longer being rendered?

          • Gerald

            I agree totally. I think it’s BS the EX gets for life! My EX has always told me that I will financially support her for life and that she will make sure I do, how is this fair to me?!?!? I think when a divorce happens all the extras and benefits should end, especially when the EX is the one who wanted the divorce. The system needs to change and be fixed, it is out of control.

          • Kate

            Gerald (and anyone else who would care to comment), how did your exwife and you come to the determination that your pension would be divided, and how did that factor into the rest of your property division?

            Obviously, without knowing the all details of anyone’s situation, none of us are qualified to say what is fair or not fair in any individual case. But I get a lot of comments, from both sides, that make me feel like this is not being handled well as part of the settlement agreement.

            It is all very interesting to me.

          • guest

            Well I think a lot of courts are ill equipped to deal with pension division. How could it possibly be legal to pay someone for 60 years when the marriage only lasted 10 or so? You said division of property shouldn’t look to the past or future and benefits provided shouldn’t be looked at…but if the military member divorces while on active duty and a pension….that hasn’t officially been earned yet, because they haven’t hit 20..is split, how exactly is that fair, and on the same side, why shouldn’t benefits that HAvE actually been earned and spent (like GI Bill) be put back into the pot? If student t loans were used instead of GI Bill…that debt would be split in the divorce

          • Kate

            You’re absolutely right – courts aren’t equipped to handle complicated divorces, and military divorces can be complicated. That’s why it is essential that both parties have smart, knowledgable legal representation and possibly the help of a mediator to craft a property settlement agreement that is fair and equitable to both parties.

            There’s no reason why it should not be LEGAL to pay someone for 60 years when the marriage only lasted 10. There are lots of good reasons why it isn’t SENSIBLE to pay someone for 60 years when the marriage lasted only 10.

            Good property agreements speak to both of the issues you mentioned: additional retirement pay earned after the time of divorce, and long-term payments for short-term divorces.

            Assuming you’re the same commenter, I think we’ll have to agree to disagree on topics of employer-provided benefits and spending that occurred within the marriage. I don’t view benefits, provided by a third-party, as a marital asset, and I certainly don’t agree that you would “bill” one side for spending that occurred during a marriage and was agreed to by both parties. Where would that ever end? Tuition? Medical expenses? Cars? Clothing? Jewelry? Daily food? Toe nail clippers?

          • guest

            But a pension is a benefit also provided by a third party….why do you think it should be characterized any different then GI Bill benefits? I don’t understand that convoluted train of thought. In regards to jewelry there have been numerous cases where it’s been split in divorce, or returned to the giver…I worked on one last month where the wife had to give back a 50k engagement ring since it was a family heirloom and considered a pre. Marital asset. Cars too are split in divorce.

  • Curt

    Does this apply to the over 10 years together? Don’t they have formalas they use and spouses get whatever that comes to for life.

    • Kate

      Yes, it does. The only thing that occurs at the magical ten year mark is that *if* the divorce decree awards a portion of retirement pay to a former spouse, the Defense Finance and Accounting Service (DFAS) is permitted to make the payment directly to the former spouse.

      There are no formulas written into law, anywhere. Many people will make up their own formulas, such as 1/2 of the percentage of time that the marriage overlapped with military service. Other ways to calculate a division might include the rank and time in service at the time of the divorce. A really good calculation would factor in all the other variables, such as the other retirement accounts the couple might have, or whether the service member might receive disability compensation from the VA.

      The reason there is no formula is because retirement pay is only one of the many assets of most divorcing couples, and decisions about it have to be made while considering all the other factors at play. In one situation, a 50-50 split might make perfect sense. In another situation, that would be completely wrong.

      Whatever division of retirement pay is designated in the retirement decree is a lifelong election, for the life of either party. In that sense, it is just like saying, “You take the blue car and I’ll take the red car.” Those divisions don’t change because of other events, like a remarriage.

  • Divorced in ’77

    First, as background, my final decree was issued in CA in 1977 when I was a Lt and married less than 7.5 years. Our personal property and monetary assets were split 50/50. My ex was awarded a portion of my future retired pay based on the number of years we were married divided by number of years served. I understand perfectly the rational in division of civilian pension saving accounts (401k, IRA, etc). I also see both sides of splitting military retirement pay. The problem is how to value a future retirement. If I left the Navy say after serving 10 years then my ex would get nothing….does not sound like an asset. Conversely, if I retired after 35 years as an Admiral (I wish) it hardly seems equitable to pay her a percentage of a much larger retirement pay over 27 years after we were divorced. My suggestion is the Federal and/or State agencies develop a valuation matrix so the “asset” can be divided at the time of divorce like civilian retirement vehicles. BTW, I asked DFAS to interpret my decree verbiage, determine the correct amount and pay her directly via allotment. DFAS refused on all counts as we were not married at least 10 years. Katie, you correctly stated the issue many times but I will try one more time. The division of military retirement whether currently eligible or possibly eligible in the future is handled by the states in accordance with state law having jurisdiction. The ONLY role (unfortunately) of the Federal government is to pay an ex by allotment if married over 10 years. Another unfortunate side story to my case is I was being transferred to Wash DC so i had the choice of divorcing in CA or waiting and divorcing in DC, VA or MD. I sought the advice of base legal who advised CA. Recap, I believe the Federal government should, as a minimum, develop a value matrix based on rank/rate, YOS, etc for the states to then treat as any other marital asset IAW state law. After all, this is no longer a male vs female issue as the percentage of female servicepeople increases. It has everything to do with fairness and watching out for your people including the families. I apologize in advance if my simplification overlooked some facets of the law after all it has been almost 49 years since divorcing.

  • USFSPA Killer

    There is a DUAL requirement for DFAS to garnishee the retiree’s retired pay – the marriage and good service time must overlap each other by 10 years, not just 10 years of marriage or 10 years of service time. Again, it’s 10 years of both marraige and service time overlapping each other.

  • USFSPA Killer

    Let’s look at the different physical aspects of property vs. pay – First, property is tangeble material – that is, it can be physically touched, held and conveyed to another person who can also do those things as it always exists. Pay is something that does not become tangeble until the paper and metal currency is within one’s hand grip, in other words it doesn’t exist until a specific event occurs – i.e. the check representing the pay is encashed, giving the legal owner of that pay the right to keep or dispense that paper and metal coinage as they so desire. The USFSPA is nothing more than judicial alchemy of magically turning something INtangeble, yet to be received, – i.e. military retired pay – into physical tangeble “property” for division between two spouses for which neither has yet received.

    • Kate

      By your logic, no future payments would be transferrable or divisable. However, in the United States, many different types of future payments are divisable. It is a fairly common thing.

      Prior to the USFSPA, military retired pay was the only type of future payment that could not be divided. The Act was passed specifically so that military retired pay would be legally equal to all other forms of future payment with regard to divisibility. It has been tested extensively in the courts, and it has been upheld repeatedly.

      It is obvious that it upsets you, but that doesn’t make it unconstitutional or illegal.

      • USFSPA Killer

        Again, let’s look at the statutory substance of military retired pay – it’s current reduced pay for current reduced service; basically, the retiree is on a legal leash but not having to show up for military duty at a duty station job. Now let’s look at a civie worker still employed who gets divorced – their current income is available for alimony calculations. Like the civilian worker who is still on their employer’s payroll, the military retiree is still on the military payroll and therefore, the retiree’s reduced current income should be available for alimony calculations – not a problem with that. Continuing to state that military retired pay has any amount of similarity to a civie pension is nothing more than emotional vitriol from gold digging love spurned vicious vengeful former spouses which was created by the 97th Congress’s push from feminist PAC’s !