The Motley Fool Discussion Boards

Previous Page

Investing/Strategies / Retirement Investing


Subject:  Re: 401k Loan and Termination Date:  4/18/2001  1:42 PM
Author:  TMFPixy Number:  29190 of 88054

Greetings, tahoepiratefan, and welcome. You wrote:

I recently got fired. I have an outstanding 401k loan. How long do I have before I must repay the loan without adverse tax consequences? I am of the belief that if I do not repay the loan within a certain timeframe that the IRS considers the balance to be a distribution, and subject to income tax and penalties as I am not 59 1/2.

Sorry about your job loss. As to the loan repayment, that's up to the plan, so your former HR folks will have to tell you what the deadline is. Typically, it will be around 90 days before the loan is called in default. That's when it becomes taxable and subject to the early withdrawal penalty as well.

Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us