Have you recently gotten divorced? As a result of your divorce, have you been ordered to pay support for your minor child or children? Are you concerned about how in the world you might be able to afford to make these payments? If so, you are far from alone. Many a New Jersey mom or dad has been in your position before. How have they handled it? There is no one-size-fits answer to that question but there is one option that many people don't know about and it might just be able to help you.
Did you know that you could use money from your company-sponsored 401(K) to make required child support payments? The U.S. Department of Labor indicates that with the creation of a Qualified Domestic Relations Order, you may very well be able to do just this. A QDRO is a legal document that outlines approved use of retirement funds for qualifying domestic events or needs. Child support is one of those needs.
The QDRO will essentially identify your child as an alternate payee on your retirement account so that payments can be made to the child. It is also possible for payments to be directed to a legal adult or other guardian for the child's use when your child is a minor. While this does tap into your future income stream, it offers you a way to support your children while they are still young.
If you would like to learn more about how to pay child support in New Jersey, please feel free to visit the parental obligations page of our family law and divorce website.