Rules for liquidating 401k

Contributions and growth pre-dating your wedding are yours and yours alone.

Therefore, if you're facing divorce and you take an early withdrawal, you face an additional problem besides the usual taxation and penalties.

Before you make any rash moves, though, you should carefully consider the consequences of making such a distribution: You won’t get the full balance.

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To receive funds from your Self-Directed IRA without penalty, you must reach the age of 59 ½ (the Roth IRA also requires that the account has been open for at least five years).

Required Minimum Distributions Traditional IRA, SEP, SIMPLE and Solo 401(k) account holders must begin taking required minimum distributions (RMD) from their accounts beginning April 1st of the year following reaching age 70 ½.

Many people are tempted to take money out of their work retirement plan when they hit a financial rough patch.

Before you pull the trigger and take an early withdrawal from a 401(k) or a 403(b), you need to fully understand the rules and penalties.

Your spouse is entitled to a portion of what you take out unless you spend it for the family's benefit.

Last modified 25-Jul-2016 20:27