When you have a 401k at your job, it is considered your retirement plan and yours alone. As long as you are alive and married, you cannot split the plan with your wife. However, if you die or get a divorce, your wife will be able to take over some or all of the 401k investments.
When a company offers a 401k retirement plan, it only offers this benefit to its employees. You can add money from your salary into your account, but other people cannot. Even though you are married, you cannot invest more per year. The contribution limit is the same for both married and single workers. Your wife can put money away in her own retirement account, but she won't be able to split the benefit of your 401k account while you're together.
If you and your wife get divorced, you can split up your 401k to settle your divorce agreement. The judge at your divorce settlement must sign a qualified domestic-relations order that explains how your 401k will be divided. Your company will divide your investments according to this order and put your wife's money in her own separate account. Since your wife isn't an employee, she won't be able to invest any extra money into the 401k. However, she can keep the money in the account until she starts making withdrawals in retirement.
Another way to transfer ownership of your 401k is by setting up your wife as the plan beneficiary. The beneficiary is the person who takes over your account after you die. It doesn't matter that your wife doesn't own any part of the account while you are alive. Once you die, your company will immediately make her the complete owner of your account. She can keep the money in the old 401k or move it into another retirement plan.
When you wife receives some or all of your 401k account, she doesn't have to leave it with your company. By using a plan rollover, your wife can move the 401k investments into her own retirement account. This is usually a good idea, because your wife can add more money to her retirement accounts but is not allowed to add anything to your 401k. She won't owe any taxes or penalties on the rollover, so there is no cost to make this switch.
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