When the timing of a divorce and retirement coincide, you may wish to learn about some options that an employer-sponsored plan might offer. Because New Jersey requires couples to divide marital assets fairly, you may have a right to receive a portion of your spouse’s retirement plan.
A simple method for deciding on fairness in dividing a retirement account may involve assessing the value of all your jointly owned assets and property. As reported by Kiplinger magazine, one spouse may keep an entire 401(k) account in exchange for giving up other property.
When may I consider trading part of a retirement account for property?
If you plan to retire soon, you may view your divorce as a means of downsizing. If you wish to continue living in your home, however, the court may allow you to do so by requiring you to “buy out” your spouse’s fair share of the house. Instead of paying cash, you may have an option to “trade” your spouse’s share of the house for your portion of a 401(k).
How may I receive a cash payment from a spouse’s pension?
Some pension plans offer regular cash payments as a benefit to an ex-spouse listed on an account. After your divorce, you may require a source of income if you relied on your spouse for support during your marriage.
To receive a one-time lump sum payout from a pension, you may need to negotiate with your spouse to determine what reflects a “fair” value. Depending on an alimony or spousal support arrangement, it may reduce the amount of a one-time fair payout from a retirement plan