How am I going to pay it back if I got displaced does anyone know?
24 replies (most recent on top)
Speaking of internet nimrods,for part 3 we have @3ich+18DG17vW, who apparently expects HR to obtain his $600 check from the Feds for him, assuming it is in addition to paying back his loan for him.
Mysteriously, he ponders: “can hr help with this too? Do you think they kept it here?”
Did HR request physical checks for everybody to keep them here? Or was “They” the IRS who decided not to fully tax the check so that they could just keep it here in their payroll system? It boggles the mind...
Granted, this post may well have been a dry comedic comment, and that would be awesome. But I tend to think that these are actual coworkers, actually somehow working in financial services.
They walk among us...
Speaking of internet nimrods, we have @2bkf+18DG17vW, a true champion of the people who is also (possibly intentionally) doing harm to the original poster by denigrating great advice from a poster:
“You have no idea why they needed money so the only stupid thing is your snotty attitude.”.
The original poster CLEARLY has no idea how a 401K or a 401K loan works, the tax status of the balance and the penalties of early withdrawal let alone understanding that not repaying the loan is a taxable and penalized withdrawal. Amazing as it seems, it’s even worse... the original poster clearly would not even know why he needed the money.,, just consider the original post:
“How am I going to pay it back if I got displaced does anyone know?”.
Grammar aside, although tortured grammar typically indicates tortured thinking, Instead of asking reasonable questions the OP actually indicates that he is helpless, doesn’t understand that he owns his own debts, that he owns his own banking accounts, that he owns his own budgeting or even is responsible for his own life. Doubtful that he understands why he borrowed from a 401K.
A rational person would ask “what job grades get the 60 day pay, and for a person who has worked x years how many weeks of severance will I receive? What are the tax and penalty implications of not paying it back? Can anyone recommend a reasonable accountant in xxx who can help with my taxes and suggest a course of action with my 401K loan?
OP, you took a loan FROM your 401K, so you borrowed from yourself. Just want to make sure that you understand that.
If you don’t pay yourself back with a payment in full to your loan in the 401K, the amount of your outstanding debt will be considered to be income and taxed. This makes sense as this income was never taxed before. Additionally, you will need to pay a 10% penalty as this is an early withdrawal unless you are 55or have other mitigating factors.
Please do yourself a favor and ignore internet nimrods such as @3ich+18DG17vW who invented a 30 to 50 year old (I assume) zone, in which the company pay it back. This is such screwed up advice that it cannot be anything but intentionally harmful.
Also i didnt get my 600 check from the Feds, can hr help with this too? Do you think they kept it here?
14 hours ago by Anonymous | 4 reactions (+0/-4)
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I think if you are in the 30 to 50 zone, the company pay it back. Call HR and verify.
Also i didnt get my 600 check from the Feds, can hr help with this too? Do you think they kept it here?
You have no idea why they needed money so the only stupid thing is your snotty attitude.
Your facts are weak too, no penalty if 55 or over.
Your 401K will go down plus you owe a penalty. It is stupid to borrow from your 401K. Stupid is as stupid does.
OP, you took a loan FROM your 401K, so you borrowed from yourself. Just want to make sure that you understand that.
Why would anyone seek answers in this cesspool.
My god, do you actually work here, or even in the financial services industry, and really not understand even the basics of borrowing, finance and debt?
Why in the world would anyone but your mother pay off your debts for you, least of all Wells. Even letting you go Wells is paying you for 2 full months of time plus 2 weeks per year severance. At least grab a snow shovel and shovel some people out for cash... this is a lesson that every adolescent learns before teenage years.
They pull it from your 401k with the penalty rates. It's in your agreement when you took the loan.
Best to ask HR rather than internet Rambos...
The simple answer is to always spend less than you earn, I.e. live below your means. Even if you are a spendthrift living in the moment, You’ll have 60 days of salary and 2 weeks per year of severance. Ample time to find a job and you can also simply pay the tax and penalty and move on, your more likely course given your question.
You do not have to pay it back, it's your money.
You will get an option to pay back that 401k loan but you may chose not to do so.
If you chose not to pay it back it will be regarded as a 401k withdrawal.
In that case you will have to pay a 10% penalty. Also, the unpaid money will be regarded as income.
I've also heard that they are considering waiting that 10% penalty for this year (due to COVID there are many people who are affected).
Godspeed
Read the terms of your loan agreement. Upon termination the loan is immediately due.
yea give it to wells to pay out of their pot, I agree
Omg. Look it up!!
I love how sound advice is routinely "down voted" on this forum, while overly emotional and/or factually inaccurate information gets the +1s.
Have Wells pay it back for letting you go, based on this info it seems it is their issue you can no longer make payments
There is a waiver on the penalties for some 401k withdrawals. I think up 2 $100K. Still have to pay ordinary taxes.
I do believe you have a certain amount of time to pay it back even if you are displaced.
Pay it back with money you have in your bank accounts. If you don't, it gets reported on a 1099-R and you'll owe income taxes plus 10% penalty on the outstanding balance.
@OP - if it's not paid back, it's counted as a taxable (penalized) disbursement. You'll have to count it as income, and pay 30% penalty.
I believe that I saw where the new 401(k) manager for the WF plan allows payback even after separation from the company. So there's that at least. Check the new plan info to verify.
Unless you're going to be homeless, or have bills related to a life threatening medical issue, it's almost never a good idea to borrow from the 401(k) my friends. Don't do it if at all possible–exhaust all other means first.
That said, you'll likely receive some "free money" from the government soon, I'd suggest using a combination of that and perhaps personal loans from family to pay the loan back, so you don't incur any early withdraw fees/penalties.
There are several good articles out there, such as:
https://www.cnbc.com/2020/06/04/heres-what-happens-to-your-401k-loan-if-you-are-laid-off.html