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Showing results for tags '403b loans payoff'.
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Hello I just realized I am stuck (possibly) with my worst scenario with my 403b loan. I was informed that my job will be discontinued in Aug, so, I panicked. I had outstanding car loan and other loans and I took a loan to pay off those. I did not realize the rule about paying back after getting laid off. What option I have ? I have x4 times money in my 403b left. I have excellent credit ratings but not sure what it means in current situation. .With best regards,
I am trying to help a very good friend. She is leaving her company (quitting) and is 55 years old It appears that she falls under the combination of rules that allows her to withdraw 403b funds with no tax penalty, only the tax liability. However the treatment of loan balances in her situation is not very clear. I couldn't find anything in the FAQ's describing her situation and forum and web search didn't reveal anything. Here is the question, she has an outstanding loan in the plan for $18,000.00 (from a total of $90,000.00). The new income of the new job is not optimal (less stress less overtime). She may need to pay off that loan by withdrawing sufficient money from the plan, absorb the tax hit and be done with those loan payments. Additionally her 2013 tax records indicate she was in a 15% marginal tax rate, hence my understanding the long-term capital gains from this distribution may even be TAX FREE!,(depending upon whether withdrawing the 18000.00 this year to pay off the 403b loan doesn't boot her to the next bracket). When I venture forth to educate myself on matters like this, I will rely on kind people to point out my possible mistaken assumptions. I found it amusing that the telephone support guy at the plan provider didn't describe the 55 and separation rules that i hope are universal to 403b. We're researching first before further contact with plan provider and making decisions. She us very nervous about making those payments, and not having enough to live on in her new job. Thus she is in a hurry to pay them off. Thanks for your help. Ray Borrowing from a retirement plan is the worst thing anyone can do (except for a second mortgages to buy a BOAT!)