One of the benefits that often comes through your career in San Antonio is a 401(k) account that allows you added financial freedom during your retirement years. Indeed, your retirement plans may be largely based on the funds you anticipate being in such an account when you stop working. Thus, like many of those that we have worked with in the past, you may be less than thrilled to learn that funds from that account may be subject to property division should you choose to get a divorce.
The contributions made to your employer-sponsored retirement account come from your income. Any income earned during your marriage is a marital asset. So, those contributions are marital assets, as well. Typically in a divorce case, the court will order that your ex-spouse roll over his or her share of those contributions into his or her own retirement account. He or she would be able to withdraw the funds without the early withdrawal penalty; in such a case, you would want to ensure that the withdrawal is in your ex-spouse’s name only, as the IRS will still levy income taxes against the withdrawal.
The 401k Help Center does offer a potential solution to keeping the full value of the 401(k) in your divorce. You can do so by giving up your claim to a marital asset of comparable value. Keep in mind, however, that the court may value your ex-spouse’s share of your 401(k) at its future potential (taking into account gains from interest and investment returns). You should weigh the impact of that concession against the benefit retaining your entire 401(k) would offer.
You can find more information on dealing with property division by continuing to explore our site.