What should I do with a lump sum distribution from a 401k in my divorce settlement?
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Comments
If you haven’t taken the distribution yet, leave it there until you’ve decided. It’s tax deferred so long as it’s in the account and there is no rush.
Most definately you should reinvest for your retirement. Why? Your spouse was investing for your joint retirement. You are simply getting your share of that. If you cash it out, you’re making a double mistake (first was marrying him/her in the first place). Don’t shoot yourself in the foot and ruin your future just to access some cash today.
Reinvest that money! In a 401(k) the money is invested in different funds and investment vehicles. Since you are recieving a lump sum, the best bet is to reinvest that money so it can keep growing. Note: I mean reinvest in things like mutual funds (which is most likely what the 401(k) was originally invested in), not bank CDs.
Talk to a financial services representative in your area and they can help you decide what is best to do.