If you were not the primary income earner in your marital home in Texas, then you may look forward to the pending conclusion of your divorce proceedings with a certain degree of trepidation. Without the financial support of your spouse, you may worry about being able to afford housing or pay for furthering your education or secure vocational training in order to return to the workforce.
Many of our past clients here at the Law Office of Irene G. Mugambi, P.C. automatically expect that alimony will provide them with the funds needed to cover the aforementioned expenses. Yet just as it was for them, the news that such assistance is not a given in your case may come as a shock. Knowing this, you should know what some other alternative sources of immediate funds may be. Your ex-spouse’s 401(k) may provide you with such assistance.
Cashing out your portion of a 401(k)
As the contributions made to your ex-spouse’s 401(k) come from marital income, they are thus subject to property division. Yet can you cash out the portion due to you? Typically taking an early disbursement from a 401(k) account results in a penalty. However, according to the website SmartAsset.com, divorce is one of the few scenarios where early withdrawals do not net penalties.
Weighing the pros and cons
Yet before your rush into this decision, you should first consider the advantages and disadvantages. While cashing out provides you with the immediate funds you need, doing so foregoes any potential growth that money may experience through years of investment returns and earned interest. If you are still several years from retirement, that growth may be significant.
You can find more information on dividing up marital assets by continuing to explore our site.