Raiding your Retirement in Divorce

Feb 6, 2020

In my last post, I set out 10 basic facts about retirement accounts in divorce in North Carolina.

One of those tips mentioned the taxes and penalties that are incurred upon an early withdrawal of retirement funds. This article from Kiplingers details exactly how this came back to bite one divorcing teacher.  

Needless to say withdrawing funds from a 401k or other retirement vehicle needs to be handled very carefully, and with the advice of an attorney or financial professional, if not both. As the article states, there are frequently alternative means of obtaining needed liquid funds that have less drastic consequences.  

Ideally, you and your spouse can agree to discuss the division use of retirement funds in a joint problem solving legal process that takes into account your individual goals and needs.  

But, even if your divorce becomes combative, and you need funds from your retirement account to pay legal fees or living expenses, proceed with extreme caution and explore your options before raiding a retirement account. 

Related posts

FAFSA, Student Aid, College Funding and Divorce

FAFSA, Student Aid, College Funding and Divorce

Paying for college is a common topic of conversation with my divorcing clients. Typically, if nothing else, divorcing parents can agree that they want their kids to go to college, and they want to financially support that in whatever way their situation allows.The...

Govern your separation agreement, or it will govern you.

Govern your separation agreement, or it will govern you.

No one knows what the future holds.  That includes (shockingly) attorneys, no matter what they tell you. That means that your divorce or family law negotiation will not cover everything that may come up in your life down the road.  Also, there is no perfect...

COVID Vaccination and Custody

COVID Vaccination and Custody

COVID has created issues for parents that we never imagined we'd have to face. The balance of being safe while not sacrificing too much of our children's lives is elusive and ephemeral. And, there are as many ways to strike that balance as there are children. These...