In–Marriage QDRO®
There is now a way to transfer funds from your retirement account to an IRA owned by a spouse for cash immediately that follows federal guidelines and avoids penalties.
Applications of an In–Marriage QDRO® include:
- Delay required minimum distributions (RMDs)
- Create a Roth IRA
- Fund a Self-Directed IRA
- Buy Investment Property
- Buy Alternative Investments
- Pay College Expenses
- Liquidate 401(k) Funds at Lower Tax Rates and without Penalty
- Access Cash during Tax Years with Large Write-Offs
- Earlier Access to Cash
- Emergent Need for Cash
- Avoid normal In-Service Distribution Rules
- Provide for a spouse in a Prenuptial Agreement regime
- Marital Issues, but no Divorce
- Medicaid Planning
- Buy Time from State Employment to Retire Early
- Create a Guaranteed Pension
- Transfer Funds away from Underfunded Pension
- Set up a Special Needs Trust
- Fund a Special Needs Trust by IRA Beneficiary Designation
What are the benefits of an In-Marriage QDRO®?
- Relationship Planning
- Growth Planning
- Tax Planning
- Married, but filing separately
- Offset business tax losses
Why not just take an In Service Distribution?
A retirement plan rollover to an IRA made while the plan participant continues to work for the employer.
- No requirement for a retirement plan to allow for an in-service distribution
- Age restrictions and penalties need to be considered. Over 59 1/2 – no penalty; Under 59 1/2 – penalty
- Effect of an in-service distribution upon ability to contribute or receive employer matching contribution must also be considered.
What does this all mean?
401(k) plans, Pension Plans, Profit Sharing Plans, State Municipal Plans, State deferred compensation plans CAN be TRANSFERRED between Married Spouses!
