baovle
Apr 12, 2008, 07:59 AM
My wife (36 years old) worked for State Street Bank in Massachusetts for six 6 years and qualified for Pension benefits. In 2006, she borrowed $7000 against her 401k in State Street Bank to remodel the home. She left SSB in the summer of 2006 for another job. In February 2007, she asked for a $9500 lump-sum distribution of the Pension from SSB and then paid off the loan ($6000 remaining) she had against her 401k.
My question is: Would she incur an early distribution penalty and how much tax she has to pay considering she paid back most of the pension money to the 401k loan?
Thanks,
Bao
My question is: Would she incur an early distribution penalty and how much tax she has to pay considering she paid back most of the pension money to the 401k loan?
Thanks,
Bao