Second, many employers provide matching contributions to your 401(k) account which can range from 0% to 100% of your contributions.The combined result is a retirement savings plan you can not afford to pass up.
Dividing an IRA: Transfer Incident If you specified that your IRA division is to be treated as a transfer incident to divorce in your agreement, no tax will be assessed on the separation transaction.
Upon leaving the company, Adam moves this 000 amount and wishes to move it to an IRA account and manage this account all by himself.
Adam therefore instructs his old 401k administrator to move these funds directly to his new broker account.
Many courts confuse this distinction by labeling both types of divisions as QDROs.
Nevertheless, you and your spouse need to delineate clearly the category into which each of your retirement assets falls when you submit your information to the judge or mediator so they are listed correctly in the divorce or separation agreement.