IRA Split after divorce, court ordered
I understand that a QDRO on the retirement accounts will enable an under 59 1/2 spouse to make withdrawals and NOT be subject to the 10% premature distribution penalty.
While IRA’s are not actually QDRO’d, is there language that can be placed in the divorce agreement that will enable an under 59 1/2 spouse to not have to incur 10% on the IRA portion of the split?
Permalink Submitted by Alan - IRA critic on Tue, 2014-07-01 16:34
No. The QDRO penalty exception only applies to qualified retirement plans, not IRAs. The ex spouses may have to consider a 72t (SEPP) plan in order to waive the 10% penalty until age 59.5. These plans are rigid and require great care to avoid making an error that will result in retroactive penalties plus interest.
Permalink Submitted by David Castelli on Wed, 2014-07-02 14:17
thank you very much for the reply
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