AboutDavid M Iannopollo Expertise I am a professional financial advisor who can assist you with answers on mutual funds, annuities, IRA's, rollovers, qualified and non-qualified retirement plans, retirement planning, educational planning, life, disability and LTC insurances.
Experience I have over 20 years experience in the business and financial world.
Question My soon to be ex-wife (civil friendship)will be getting half of my esop aroung $240,000. A qdro was filed so i guess she will not be hit with a penalty. Our question is this.....She would like to hold out around $20,000 and put the rest in a 401k. she is 52 years old, so when will she be able to start pulling money out of her 401k without being charged a pealty?
Answer Hi Mike,
I would doubt that she would be able to rollover these funds to a 401k, nor should she want to. An IRA would be a far better choice and she could keep it in this stock if she wanted to. If she takes $20k as a distribution, they will withhold 20% for federal taxes. She will owe more or less at tax time depending on her tax bracket. She will also be charged a 10% early withdrawal fee plus any applicable state tax. She would then have to wait until age 59 1/2 to take penalty free withdrawals.
Here's a word of advice to both of you. When dealing with ESOP funds, seek a competent advisor before doing anything in regards to selling the stock. There are special rules that apply that could be far more favorable to you if done properly. I hope this helps! Best of luck!
