401k loan and pulling momey out of a 401k to pay the loan off

Question

Jul 16, 2007, 02:32 PM

mmhudd

New Member

Join Date: Oct 2006

Posts: 1

401k loan and pulling momey out of a 401k to pay the loan off

I have just turned 591/2 and have a 5,000 dollar loan from my 401k......can I withdraw monies to pay this loan off.....and how much will I be taxed if I do?

Mickey Huddleston

Answers

Jul 22, 2007, 07:24 AM	#2

Fr_Chuck

Christianity Expert

Join Date: Nov 2005

Location: Atlanta GA

Posts: 26,163

???? you want to take money out of a 401K, to pay off a loan in the 401K ?? I must be missing something somewhere.....

You merely don't pay for the loan ( notify them) they view the loan as a distribution, you will pay your normal tax rate. 25 to 50 percent depending on your income and tax status.

Just give the Admin a call of your plan and let them know you want the loan changed to a withdraw. No need to take money out, to pay it off.

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