I Have a question about my 401k. I currently have an outstanding loan and will be leaving my place of employment soon. I have approx 20k in my 401k, the loan
balance is approx 10k. Will having a loan affect my wanting to take the 20k as a dispursment? I need this 20k minus taxes ASAP. Thanks
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401k loan
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 renal123 |
401k loan |
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Posts: 2 (01/13/08 14:08:35) |
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DCK101 |
401k Loan | ||
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Posts: 316 (01/14/08 18:58:37) Elite Member |
This isn't clear. Is your total balance, including the loan, $20k or $30k?
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renal123 |
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Posts: 2 (01/15/08 11:23:05) |
To clarify, the total balance is 30k. I know cashing out 401k isn't a good idea, but i lost my job and the credit card bills some as high as 28% are way
too much. Thanks in advance for any advice you may have.
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DCK101 |
401(k) Loan | ||
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Posts: 317 (01/15/08 18:46:55) Elite Member |
The outstanding loan will be offset against the balance, so the gross disbursement will be $20k. The entire balance of 30k will be subject to taxes however.
Also, the 20% tax witholding will be calculated on entire balance, so the net disbursement will be approximately $14k ($20k - $6k). You will report $30k of
income for tax purposes.
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kparguello |
Don't forget the 10% penalty | ||
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Posts: 1 (06/19/08 06:11:16) |
If you are younger than 59 1/2 you will also incur a 10% penalty on the distribution amount.
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not provided as legal, tax or investment advice to the questioner's situation. Individual situations vary. Please consult
your tax, legal or financial advisor for more detailed information and advice.
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