Common Uses of In Marriage QDRO®!

Diversify investments ahead of stock market downturn.

The market has been on a long bull run. How fast can a working individual who looks at their 401(k) statement once per quarter react to a correction or a crash? George is 56 years old and has $625,000 in his 401(k). His wife, Peggy, is also 56 years old. Both are starting to think about retirement, but cannot do READ MORE

Rolling funds to the younger spouse to delay Required Minimum Distributions (RMDs).

John is a 68-year old employee with $595,000 in his 401(k). John is married to Susan who is 57 years old with a good income. John and Susan have very little debt, live a modest lifestyle and are both in good health. John is fast approaching the age where he must begin drawing a mandatory distribution from his 401(k). John READ MORE

Rolling funds to the older spouse to access funds at earlier time.

Susan has $450,000 in her 401(k) and is 55 years old. John was a state employee and has recently retired at the age of 60. The parties would like to be able to utilize some of Susan’s 401(k) to subsidize John’s decreased income. The In Marriage QDRO® would allow Susan to transfer funds to an IRA in John’s name. Because READ MORE

Wealthier spouse has a prenuptial agreement and files married, but separate tax returns, but still wants to provide security for the less wealthy spouse.

Mary and Frank have a prenuptial agreement because Mary comes from a wealthy family. Mary wants to provide some financial security for Frank even though she does not wish to convert to a joint property regime. Mary has $600,000 in a qualified profit sharing plan. Without the In Marriage QDRO®, the normal way to provide such security is to simply READ MORE

Avoid normal In-Service Distribution rules by specifically removing after-tax funds from the 401(k).

Jon wants to do an In-Service Distribution, but only wants to withdraw the after-tax portion of his 401(k). His family wants to put a down payment on a house. However, the Plan’s In-Service Distribution rules require the liquidation of pre-tax funds before allowing Jon to access the after-tax portion. An In Marriage QDRO® may allow Jon to select precisely which portion READ MORE

Turn 401(k) funds into a guaranteed pension.

Michael has $1,000,000 in a 401(k) plan. His wife, Stephanie, is much younger and he is concerned about leaving her financially stable in case of health issues. An In Marriage QDRO® would allow Michael to take pre-tax funds that are captured inside the 401(k) and move them into an IRA in Stephanie’s name. This would allow Stephanie to purchase guaranteed READ MORE

Utilize 401(k) to buy property or other alternative investments.

A couple can take advantage of the real estate market or construction expertise to effectively manage rental properties and/or flip houses. An In Marriage QDRO® may allow funds from a 401(k) to be transferred into a self-directed IRA, which may hold real estate and other alternative investments instead of securities. READ LESS

One spouse wants to retire from state employment early.

Peggy is a state employee with a teacher’s pension. She is 50 years old and has been working with the state for 24 years. Peggy would like to retire soon, but she does not have 30 years of service and is not yet 55. She is married to Jim, who has a 401(k) worth $375,000. Peggy has a deferred compensation READ MORE

Family needs cash.

Jane is a 51-year-old employee of ABC Corporation with a 401(k) of $220,000. Jane’s husband just turned 59 years old and does not have his own 401(k) or IRA because he is self-employed. Their family is in need of additional income because Tom’s business has been slow the last two years. They previously took out a loan from Jane’s 401(k) READ MORE