Paying off the ex…

ThrowAwayRAOoops · 2021-06-16T19:59:27+00:00

Assuming you're splitting your 401k you can also give her that amount you owe her more in the distribution of assets. Most of the time dollars are not consider whole dollars in a retirement account because they are pre-tax. Attorneys often try to negotiation the value of a retirement $1 down as much as they can on the receiving side. Still - divorce is an exception to th 10% withdrawl penalty AND in the QDRO she can take it as a roll over into another qualifying plan or as cash or you can do both.

Say you have $500k in your 401k and she gets half - that's $250k that goes to her automatically.

You can add an additional amount from your half of the 401k to make up for the difference in the home equity so you don't have to take out another loan. In that case say you were giving her $.80 on the $1 basically to make up for the 20% in taxes she will pay automatically on the cash out.

In that case if you owed her $35k you would transfer via the QDRO an additional $43,750 ($43,750*.80=$35,000) from your half of 401k plan. She would end up getting $293,750 in total from the 401k asset. At that moment, she's got all her money and you're done. Once the QDRO is executed she signs a quit claim on the property for good measure and you go your separate ways.

Your QDRO language needs to match what the 401k provider requires to execute it so you should check with them on how to do it. She should be able to get both cash and roll over into qualifying plan from this if it's done right and if your 401k provider supports that - the language in the decree needs to be specific and you might even need to hire someone who specializes in QDROs to make sure it is done right.

dday_throwaway3 · 2021-06-16T16:31:27+00:00

QDRO from a retirement account.

jimsmythee · 2021-06-17T15:30:04+00:00

There are pros and cons to each situation.

The 401k loan is a good idea IF and only IF you aren't going to change jobs in the next 5 years. I did a 401k loan once and the loan was 5% interest, but I was paying the interest back to myself. So it was a good deal. From my exwife, we were both fresh out of a bankruptcy and I needed to buy a car ASAP.

The HELOC is a good deal, IF and only IF, you aren't going to sell or refinance that house in the next 5 years.

The refinance is good idea, IF and only IF, you can keep the new interest rate down to 1 percentage point within your current loan. The way loans are right now, looks like a good idea.

Daylyte12 · 2021-06-17T16:52:42+00:00

She can with nothing and she leaves with a balloon 🎈 payment 😂

Title	Paying off the ex…
Author	Calm_Tomato
Upvotes	8
Comments	13
Date	June 16, 2021 4:27 PM UTC (5 years ago)
Subreddit	Posted in /r/Divorce_Men
Original Link	https://old.reddit.com/r/Divorce_Men/comments/o18v22/paying_off_the_ex/
Archive Link	https://theredarchive.com/r/Divorce_Men/paying-off-the-ex.816732 https://theredarchive.com/post/816732

Comments