401k

[Kimmyf1965]

What is the name of your state? Tennessee

My exhusband quit his job after 17 years with the company. Out of that 17 years he was with me about 15 to 16 years. He cashed in all of his 401k. Would our son be eligible for some of this money under child support guide lines since he contributed while we were together and cashed in after we separated.

 

[nextwife]

Income earned from the 401K may be considered part of his total income toward CS. Did he roll it over or totally cash it in? Income tax, if cashed in, must first be paid on it. If he rolled it over, then only the distributions would be income. You personally would only be entitled to whatever portion of his retirement was ordered in the divorce decree.

Wasn't he supporting his son from the earnings he was making during the years he earned the money used to contribute into the 401K?

 

[nextwife]

I wrote back to your PM, but wanted to post so the info is there.

It is important to keep in mind that 401K funds were already earned years ago, and are a type of savings from which he is now drawing. CS formulas count gross income BEFORE voluntary 401K contributions. This means that certain 401K funds already had CS paid on that income in the year earned, or it was earned prior to the existance of a CS order.

http://216.239.41.104/search?q=cache:qZxm0PltLm8J:www.arnold.af.mil/aedc/ja/Child%20Support.doc+tennessee+child+support+income+401K++&hl=en

"Gross or net income is not reduced by 401K contributions, union dues, medical insurance, or other deductions from one's pay check. "

So, he already was paying CS on that money when he earned it. And anything before he had a CS order did not require he pay CS on it.

 

[Kimmyf1965]

More about 401k

So what you are saying is basically anything that the company matched or interest so to speak would be considered income? Not the portion that he put in to 401K. In addition it would be interest he received while we were together so I could try to make him calculate and reimburse us for the interest/company match portion only?

Thanks for your help!!!!

 

[nextwife]

Yes, if there were matching funds (and not all 401K contributions are subject to matching funds) those would be income in the year withdrawn, as would earnings when withdrawn. It's just part of his total annual income.

However, if he is working less, the annual income once you count those funds may be the same or less than last year. If you go for a modification and his total income has DROPPED, the CS may go down. So think about whether you want to open that can of worms.

Has he quit because he's eligible for retirement?

 

[Kimmyf1965]

No, he did not retire and he is actually making a little more money on his new job. He left his former company in May of 2003 and had a new job lined up. He started out making a little less than he was making at his former job but now is making a little more. I know the former company matched his 401k contributions but I'm not sure to what extent and I'm sure that he made quiet a bit of interest.

Thanks again for all of your help.