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    freemanr's Avatar
    freemanr Posts: 1, Reputation: 1
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    #1

    Nov 17, 2008, 05:54 PM
    401K Withdrawl During a Divorce
    I am currently in the settlement portion of my divorce and my wife get 50% of my 401K. What type of tax penalties will be applied to me for withdrawing the money for her share. Can I take a loan out for her portion and repay overtime.
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    Nov 18, 2008, 06:22 AM

    There should be no tax penalties to you at all. If the divorce decree specifies that she gets 50%, the plan administrator can make a distribution to her (not you), which she can then roll into her own IRA. You will not have to pay the 10% early withdrawal penalty, as long as you have a "qualified domestic relations order" that specifies what she is to get. Talk to your plan administrator to make sure you have the correct paperwork. No need to take a loan.
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