what is the rule in NC for 401k split. my husband chose not to have a 401k for years because he wanted a larger paycheck for “manly” reasons. He has one now… it’s performed well… but mine is double. It never occurred to me that my simple divorce would turn greedy and nasty. I would NEVER go after “his retirement money” because he earned it… but he’s obviously gotten some advice from ‘friends’. So what are the rules?
My understanding is the spouse with more has to make up the difference at the time of divorce between and it’s payable at age 70.5.
If an Equitable Distribution is determined to be 50/50, then yes the accounts are equalized and the portion that needs to be transferred is transferred now, via a Domestic Relations Order. It is a court order that allows the Plan to transfer the amount necessary into a new account for the recipient spouse.
The balance is transferred to another retirement account for the other spouse; it is not automatically withdrawn. If a withdrawn is made in conjunction with a transfer subject to equitable distribution, the party withdrawing funds does not have to pay a penalty, but would have to pay taxes on the withdrawal as income.
I have 401K from previous employm. A job I no longer hav. Can I roll it over in a different fund without being penalized or ordered to pay a portion to make equal my wife’s and my 401K?
You could roll it into an IRA and then have the divorce order split the IRA, but either way, it needs to be done via court order to transfer the funds to her name.