These are rapidly decreasing in value. In some cases where there are a lot of debts, and people want to avoid bankruptcy, it may make sense to take the husband’s 401K and/or IRA and roll it over to the wife, if she has an income. This way there are no penalties. She can then take the money out for payment of marital debts, and her taxes will be at a lower rate. These are things to carefully scrutinize in a divorce where there are substantial debts and it may be necessary to go into 401Ks or IRAs to pay them.
Recently, I had a first in my career where a client was laid off from General Motors, would not be eligible for his pension for approximately 10 more years, and found out that he was able to cash inthe pension for a fairly substantial amount of money based upon the present value of the future benefits. I had never heard of this before, and it may be an option worth exploring in certain cases. In this situation, you are going to be using the pension to pay off debts, and to give each of the parties some money to start rebuilding their lives. There will be no future pension if it is bought out now.