Using 401(k) assets to pay for expenses during the divorce process can be costly. If you are under 59 ½ years old, you may have to pay income tax and a 10% penalty on the withdrawal. It may be a better option to take a loan against the 401(k) up to maximum of $50,000. But before resorting to raiding any retirement funds, it would be best to consult with a financial professional such as a certified divorce financial analyst who can review your options. Read this article for more information.
Fidelity’s Divorce and Money Study provides some important insights regarding the effects of divorce on the financial and emotional well-being of couples. Being involved and engaged in financial matters during the marriage provides an advantage for dealing with the divorce and for recovering after the divorce. Read more about the study.