Can I Close My 401k Account To Payoff The Remaining Balance From A 50% Loan?
I received a 50% loan of $9k in '05. The remaining balance is under $5k. I want to closeout my 401k account w/ my employer upon leaving the company. They will deduct the loan balance, charge penalty fees and then I will receive the balance. What is the downside to this?
Answers
The total amount will also have to be claimed as income on this year's taxes.
answered 3 months ago
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If you close the account, they will withhold 20% for taxes. When tax time comes, you will have to py taxes on what you received plus you'll get whacked a 10% penalty.
answered 3 months ago
I agree with sy on this one. why not roll over the 401k keep making payments increasing your credit score thus decreasing your tax bracket? (and still have the 401k to boot...what is the downside to this?)
answered 3 months ago
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