dannyntammy
Jun 12, 2012, 12:33 PM
My wife is leaving her job, and currently has a $5000 outstanding 401k loan. She is going to cash out her pension and pay the 20% tax and open a Roth IRA. I also currently have a 401k loan that is about $2000. Would it be smart to pay off my loan with part of her retirement pension and get another 401k loan to pay off her loan so we are not hit with the 20% tax and 10% penalty fee, as well as any taxes that will need to be paid to our state?
It seems like borrowing $2000 from the payout and opening a ROTH IRA with the rest would less of an impact. I am not worried about having a 401k loan, as I am not leaving my job and I am very stable.
Thanks for any help or advice
It seems like borrowing $2000 from the payout and opening a ROTH IRA with the rest would less of an impact. I am not worried about having a 401k loan, as I am not leaving my job and I am very stable.
Thanks for any help or advice