Factor in Taxes on Retirement Accounts Before Dividing Marital Assets

March 24, 2011
Categories: Colorado Divorce Info | Author: Harris Law Firm

For couples over 50, retirement assets held in 401(k)s, 403(b)s, and other retirement accounts may represent a significant portion of their net worth. At age 59 1/2,retirement assets can be distributed without penalty, but the distribution is still subject to taxes upon withdrawal. If an individual is subject to a 30% tax bracket , then the net value of the account is really only about 70% of the statement balance.  According to the lawyers at The Harris Law Firm, before marital assets are distributed during a divorce, it is important to consider the after-tax value of the retirement  assets before deciding on an equitable division.

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