Fighting to keep your full 401(k)

On Behalf of | Jan 4, 2021 | Divorce

As you envision your retirement years in Wisconsin, your spouse likely figures heavily into those plans. Your divorce, then, certainly will impact that potential future. However, the impact goes far beyond exactly who you will spend that time with. 

The fact that 401(k) accounts are subject to property division typically comes as quite a shock to many of our clients here at the Lang Law Office. Yet if this surprise leaves you worrying about how you will be able to meet your current retirement plans, you should know that there are options available to you when dealing with the division of these funds. 

Can you keep your full 401(k)?

According to the 401(k) Help Center, keeping your full 401(k) counts among these options. To do so, you simply need to convince your ex-spouse to relinquish their claim to the contributions made to your 401(k) during your marriage. Doing this will likely require that you give up your interest in another marital asset of comparable value in exchange. Thus, they receive immediate compensation for their sacrifice, and your retirement plans remain largely in place. 

Is it worth it?

However, you should not commit to this particular course of action without weighing the pros and cons. While keeping your full 401(k) helps preserve your retirement plans, you may have to give up more than you realize (especially if you are still several years away from retirement). Keep in mind that the court values your ex-spouse’s portion of your 401(k) at its potential future value (after years of investment returns and earned interest). This means that their estimated value may be much more than you currently think. 

You can find more information on dealing with property division by continuing to explore our site.