401k plan help?
Answer:
If you stopped working yuor employer would cease to take out payment sof course.
What they don't usually mention(butis on your 401-k record is that it's not really a loan. They sell so many shares of your 401-k stock and as you pay this back they buy thoses shares abck a few at a time monthly.
So if you did not pay it back your 401-k would be that much short, plus the government at the end of the year wold treat it as income and tax it plus a penality for early withdrawal.(UNLESS YO ARE AT LEAST 59 1/2 YEAR SOLD IN CHICH CASE YU CAN WITHDRAW ANY AMOUNT PAYING ONLY STATE AND FEDERAL TAXES WITH OUT PENALITY.
YOu are best to repay it. The interest they charge you is supposed to go into your acocunt as well as the principal.
This is called a loan in name only so as to keep from paying taxes and a penality on the amount with drawn as you are repaying it.
401k loan? :( This is a NEVER activity. You wouldn't borrow against your social security would you?- even though the government has. Well here's how it works. No you don't have to pay out a 401k loan. When you retire you may have taxes and penalties due on that loan balance and your rollover will be reduced by the loan amount.
yes when u retire
A 401K loan will either be repaid through payroll deductions or when the plan terminates. For example if you terminate your employment, the loan will be paid out of the plan proceeds and will cause a taxable event.
You always have to pay back a loan. If you don't, they'll likely consider the money you borrowed a withdrawal, and you'll need to pay the IRS penalty in taxes.
So take whatever you borrowed and multiply by 40%. That's an expensive interest rate!!
If I were you, and if you already have that loan but can't pay it, I would get a 2nd job and work like the dickens to pay it off.
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