Dividing a military pension in divorce means navigating both state and federal law. Here's what to know.
Military pension benefits are part of the property that needs to be divided when you get divorced, and as with your other marital property, the law of the state where you get divorced controls things like whether you're in a community property or equitable distribution state, and how large a share of the marital estate you're entitled to.
But military retired pay is a federal entitlement, not an ordinary pension, so federal law also plays a role here in a way it doesn't for most other assets. If a service member is already retired when the divorce begins, calculating and dividing the military pension is relatively straightforward, because there's an actual monthly pension amount to work with.
If the service member is still on active duty and hasn't yet retired at the time of the divorce, as of 2016, federal law dictates the exact formula courts must use to calculate the marital share of a pension: the share must be based on the member's rank (or "high-36" pay average) and years of service as of the date of the divorce, not a projection of what the member might earn by the time they actually retire. This is sometimes called the "frozen benefit" method. Once that share is set, it grows only through cost-of-living adjustments until the member retires and payments begin. Courts and attorneys typically use Department of Defense worksheets and formulas to do this calculation. (10 U.S.C. § 1408 (2026).)
Should Civilian Spouses Take a Lump Sum or “Wait and See”?
When dividing a military pension, the civilian spouse has the option to wait to receive a share of the benefits when the service member retires, or to accept a lump-sum buyout, either for cash or in exchange for other marital assets.
Some lawyers think it’s often better for a civilian spouse to take a lump sum at the time of divorce, rather than remain enmeshed in a system that carries some uncertainty. The frozen benefit method fixes the dollar amount used to calculate the marital share as of the date of the divorce (see above), so you no longer have to guess what rank or pay grade the member will have reached by the time they eventually retire. But a military pension generally isn't payable at all unless the member completes at least 20 years of service, so there's no guarantee the member will ever actually retire from the military or that the pension won't be reduced by something like VA disability benefits (more on that below).
These uncertainties lead some judges to enter a "wait and see" order, retaining the right to finalize how benefits will be divided once the service member actually retires or leaves the service. This means ex-spouses can look forward to additional legal fees and engagement with each other at some unknown future date—not a prospect most divorcing spouses relish.
Another reason you might want to take a lump sum instead of waiting for your military spouse to retire is if you don’t qualify under the 10/10 rule. The 10/10 rule says that unless you were married for at least 10 years with the service member having at least 10 overlapping years of military service, the military's payment center (DFAS) won't pay your share of the retirement directly to you. If you wait, you’ll be relying on your former spouse to pay you your share, and if many years have passed between your divorce and your spouse’s retirement, it may be difficult to enforce the order if your spouse fails to live up to its terms. (10 U.S.C. § 1408 (2026).)
When Do Civilian Spouses Get Their Share?
If you take a lump sum buyout of your share in your military spouse’s retirement, you’ll receive it when you settle your divorce. If you don’t, you’ll be waiting to get your share later—but what does later mean?
Your spouse may continue working for many years after becoming eligible for retirement benefits, while you may want to start receiving your share of those benefits as early as possible. In many states, you’ll be able to include a provision in your divorce judgment that says you’re entitled to receive your share as soon as your former spouse becomes eligible for retirement, whether or not they actually retire at that point. Building a specific, calculable date into the judgment avoids ambiguity later.
What Gets Divided?
Federal law provides that state courts may divide only a service member's “disposable retired pay” in a divorce. Disposable retired pay means the service member’s gross retirement pay, minus certain deductions the government takes back—for example, prior overpayments, court-martial fines or forfeitures, or premiums for the Survivor Benefit Plan. Any order dividing retirement benefits should use the specific term disposable retired pay so it’s clear what’s being divided.
Disposable retired pay also excludes VA disability pay benefits. This means that a service member who is receiving (or later becomes eligible for and elects) VA disability compensation typically must waive an equivalent amount of retirement pay, which reduces the pool of disposable retired pay available to divide and the amount the former spouse ultimately receives. In practice, there isn't much a state court judge can do to protect the former spouse's share once a valid disability waiver is in place. But if the veteran is rated 50% or more disabled and qualifies for Concurrent Retirement and Disability Pay (CRDP), that program restores the offset dollar-for-dollar. The restored amount counts as disposable retired pay again and can be divided.
Bankruptcy and Retirement
A share of military retirement awarded as part of a divorce property division is treated as a nondischargeable debt in Chapter 7 bankruptcy, similar to support obligations, meaning a military spouse who files for Chapter 7 still owes the other spouse their share of the pension.
Learn more about bankruptcy for military personnel.
Old Bonus Elections (CBS/REDUX)
Some service members who entered the military between 1986 and 2017 took a one-time $30,000 bonus mid-career in exchange for a permanently reduced pension (a plan sometimes called CBS/REDUX). This option hasn't been available since 2018, so it only affects a shrinking number of retirees. If your former spouse is one of them, know that this election can lower the amount you receive. Consider adding language to your divorce settlement agreement requiring disclosure of this type of election.
Getting Help With Your Case
Military pension division is high-stakes and complex, involving federal and state laws. It's worth having a family law attorney experienced with military divorce review your specific situation before finalizing any settlement.
If you can't afford a lawyer, Military OneSource offers free legal assistance and other resources for service members and their families. If you have children, learn more about child custody and calculating child support when a parent is in the military.
