Many of those in Torrington going through divorce proceedings often find that surprises tend to most often arise when detailing property division. Whether or not those surprises are good or bad depend on the perspective of each individual party. For example, one who has worked to build up a solid 401k in preparation for their retirement may be disappointed to learn the contributions made to that account during their marriage are subject to equitable division. On the other hand, the one entitled to a portion of their ex-spouse’s 401k may be pleasantly surprised at the prospect of coming into to an unanticipated financial windfall.
For those who fall into the former category, the 401k Help Center suggests that there may indeed be a way to keep the full value of their 401k. This does not come, however, without a small bit of sacrifice. One must approach their ex-spouse with the idea of them relinquishing their claim to a portion of their 401k in exchange for full ownership of another marital asset of comparable value. Those considering this option should know that the value of the 401k amount that they are asking their ex-spouses to forgo is based on its future potential value. Thus, the asset they must abandon their interest in may be more valuable than they anticipate.
The people who stand to receive a portion of an ex-spouse’s 401k As part of their divorce may want to have immediate access to those funds. Typically this would result in an early withdrawal penalty (if the one making the withdrawal has yet to reach the age of retirement). However, according to information shared by CNBC.com, divorce is one of the few situations where an early withdrawal can be made without accruing a penalty.