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New job...Rolling over 401k w/ a loan balance?
Posted on 9/11/18 at 6:36 pm
Posted on 9/11/18 at 6:36 pm
Started a new job, and i want to roll over my 401k from old job to new job.
I took out a small loan against my 401k at my old job a few months ago, that i was paying back (out of weekly paycheck), and still have a balance.
How do i go about rolling the 401k over from my old job to new job with me still having a small balance needing to be paid off?
I took out a small loan against my 401k at my old job a few months ago, that i was paying back (out of weekly paycheck), and still have a balance.
How do i go about rolling the 401k over from my old job to new job with me still having a small balance needing to be paid off?
5
Posted on 9/11/18 at 6:41 pm to Modern
Pay off the balance immediately. Leaving jobs usually means it's due in full.
Posted on 9/11/18 at 6:49 pm to Modern
If you don't pay the balance before you leave, it counts as an early withdrawal and will have associated tax penalties.
Posted on 9/11/18 at 7:07 pm to Modern
Depends on your plans rules. I was in a similar situation as you but as long as I keep making payments on the loan everything is good. Here’s another thing though, I can’t roll my old 401k into my new employer’s 401k plan or an IRA until the loan is paid back without it being an early withdrawal.
Posted on 9/11/18 at 7:42 pm to 3deadtrolls
quote:most likely, but it deoends. He needs to contact his 401k administrator and find out exactly in his case.
If you don't pay the balance before you leave, it counts as an early withdrawal and will have associated tax penalties.
But yeah most of the time that money is due immediately.
Posted on 9/12/18 at 9:01 am to Modern
You probably want to pay it off. It will likely be treated as a deemed distribution at the time of rollover and taxes will be due. Check your plan document to be sure of how this is treated.
I’ve never heard of rolling over a loan and deal with 401k plans a good bit. Lots of plans don’t even allow loans so you would need knowledge of the plan you are rolling into to be sure
I’ve never heard of rolling over a loan and deal with 401k plans a good bit. Lots of plans don’t even allow loans so you would need knowledge of the plan you are rolling into to be sure
Posted on 9/12/18 at 9:07 am to OceanMan
quote:
You probably want to pay it off. It will likely be treated as a deemed distribution at the time of rollover and taxes will be due. Check your plan document to be sure of how this is treated.
I’ve never heard of rolling over a loan and deal with 401k plans a good bit. Lots of plans don’t even allow loans so you would need knowledge of the plan you are rolling into to be sure
I agree with this.
It's unlikely, but if your plan allows the loan to continue after separation then just keep paying down the loan and wait to roll it over once it's all paid back.
Posted on 9/12/18 at 9:21 am to SLafourche07
Good point. You can more than likely delay rollover until the loan is paid back. But your current employer will not be able to defer payroll to pay back the loan, so would need to check to see if funds could be put in manually to pay back.
Point is every plan is different and has different rules. You will need to speak with the plan administrator to be sure
Point is every plan is different and has different rules. You will need to speak with the plan administrator to be sure
Posted on 9/13/18 at 6:46 pm to Modern
When I switched jobs I was able to continue paying on my loan without any penalties depends on plan like others have said
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