I have a loan against my retirement plan. my position maybe eliminated if so will the loan will be satisfied with balance on the retirement plan ? Or would the balance be deduced from the package?
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I had a loan outstanding when I quit.
It was the same terms as when taken out, xx a month for xx months.
Only difference was I had to mail a cashiers check each month for payment.
Thanks for the replies! And to the troll , you are clueless! Like one of the guys said there are smart ways to do it. And yes, I plan to pay it off, I was just wondering if it was something I need it to do directly or if it was handled by citi during the layoff. I still have my role but I’m not sure my role will survive the next wave of layoffs.
As long as the plan remains at Citi, you’ll be able to make your monthly payment until loan is satisfied. If you default on payments then remainder of loan will be reported to IRS as a withdrawal and you will owe taxes/penalty. Keep making monthly payments you’ll be fine.
I also took a loan NOT because I wasn't managing my money, it was because I needed it and didn't expect to lose my job. You will have to pay it back or pay 20% tax on it if it's through fidelity, even though it's your money.
If you do not pay off the loan in full within the 90 day window, the total outstanding balance will be considered a loan offset. With a loan offset, the remaining loan amount is reported on a 1099-R and will be treated as a taxable event. The loan offset balance may also be subject to an early distribution penalty of 10% if you are under the age of 59 ½ (unless you qualify for an exemption).
Don't listen to the last troll. Lots of people take loans on their 401, Especially if you really need the money for an emergency or it's ill performing. 2 years ago I took a loan on mine when it was hemorrhaging money and put it in a product that was performing better. The net from the penalty still yielded me a profit. It is your money after all. Anyway, I can't answer your question but it's a good one.
WTF are you taking out a loan against your pension? :D If you have to do that than probably you are not managing your money correctly in the first place.