QDRO

Submitted by Bob W on Fri, 2011-01-07 22:15

I spoke with a lady who is divorced. Based on the QDRO, her ex-husband’s company moved money into a 401k account for her from his 401k account.

My understanding is that she could potentially take a 1 time withdrawal from the 401k without the 10% penalty.
She’s 40 years old.
This would have to be taken from the 401k prior to rolling over the 401k to an IRA.

What are the stipulations for the 1 time withdrawal?
Am I missing anything?

Thanks,
Bob



Submitted by mk foss on Sat, 2011-01-08 00:23

The QDRO will specify the terms and circumstances under which the former spouse can withdraw benefits. Often no benefits are available until the earliest retirement age of the employee spouse. You are correct that there is no 10% penalty on funds withdrawn from a qualified plan pursuant to a QDRO but if the plan is rolled over a 10% penalty will apply to IRA distributions.

Basically you need the QDRO or an explanation from the attorney who created it or the plan administrator before you can do anything else.



Submitted by Bob W on Mon, 2011-01-10 13:20

Thanks@



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