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Is there an option with 401K's to liquidate a portion in a divorce?
I am currently about a week out from filing for divorce. We are splitting peacefully and agree on most of the financial stuff. I am currently going back to school after staying home with the kids for the past 11 years. The only income I will get right away is alimony/child support and possibly cash from the 401k. I would use this to pay bills, etc. while I continue to get my degree. I know it is better to keep the 401k money invested, however, I don't really have a choice to do so right now and still live on my own. I may get a decent amount of financial aid money, but I cannot apply for that until we are legally separated. I'm sure there are tax deterrents for this- I'm hoping I'd have some cash left.
1 Answer
- JudyLv 78 years agoFavorite Answer
If part of the 401K is transferred to the other spouse but the money is left in, it's not taxable. But it is if taken out.