Using retirement account proceeds for a home purchase

I’m 54 and will be getting a distribution from my husband’s 401k and from his rollover account. Will I get a tax penalty if I use it to help buy a house for me and the kids?

Receiving a distribution from your husband’s 401(k) pursuant to a qualified domestic relations order (QDRO) will not result in taxes being owed or other penalty.

However, if you withdraw the funds after they are transferred to you pursuant to the QDRO, then you will have to pay taxes and you may be subject to an early withdrawal penalty unless you opt to take cash for the 401(k) funds.

Anna Ayscue

Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest

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