Be Careful About 401(k) LoansBe Careful About 401(k) LoansIf you have an outstanding 401(k) loan with your employer when you are terminated or take a job elsewhere, your employer will reduce your plan benefit by the unpaid loan balance. This offset is considered a distribution, so you'll have to include it in your taxable income for the year. You can avoid this outcome by repaying the loan with separate funds.
If you have an outstanding 401(k) loan with your employer when you are terminated or take a job elsewhere, your employer will reduce your plan benefit by the unpaid loan balance. This offset is considered a distribution, so you'll have to include it in your taxable income for the year. You can avoid this outcome by repaying the loan with separate funds.
The 360 Degrees of Financial Literacy Web site offers general information for managing personal finances and does not recommend specific financial actions. For financial advice tailored to your situation, please contact an expert such as a CPA or a personal financial advisor.
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