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lori

Can 403(b) Funds Be Used To Pay Off A 401(k) Loan?

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403(b) is terminating and the participants are getting the option to rollover their 403(b) funds to their 401(k). One participant wants to use those funds to pay off their loan. Wouldn't seem to make much sense since, it would have to be distributed and taxed first, then used to pay off the loan, if that is an option.

 

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Agreed. If what you described was an option, it wouldn't seem to make much sense since the amount withdrawn to pay off the loan would be a taxable distribution.

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