Do you usually still have to pay back a loan on my 401k after you were laid off and keep the account open ? Should I put it in an IRA ?

Best Answer:

BlueEyedGirl: If you leave a job with an outstanding loan, you normally have 60 days to pay back the balance of the loan or else it becomes a deemed distribution. Basically, the balance of the loan becomes taxable and subject to a 10% penalty if you are not 59.5 years old.

Other answer:

BlueEyedGirl:
if you leave a job with an outstanding loan, you normally have 60 days to pay back the balance of the loan or else it becomes a deemed distribution… basically, the balance of the loan becomes taxable and subject to a 10% penalty if you are not 59…5 years old…
Ann:
if you leave a job with an outstanding loan, you normally have 60 days to pay back the balance of the loan or else it becomes a deemed distribution… basically, the balance of the loan becomes taxable and subject to a 10% penalty if you are not 59…5 years old…
PetrolHead:
if you don't, it becomes a withdrawal and you pay tax on it…
Sue:
if you've lost your job and have an outstanding 401k loan, the remaining balance of the loan instantly becomes a distribution and you shall be issued a 1099r for it… rollover any amount that is remaining in your 401k to an ira…
Oh Wise One:
I've actually had to research this before! Basically the way it works is once you leave the company (regardless of how) your loan is due in full. You are required to pay it off because you are no longer employed. There are a couple ways around it though. You could continue to make monthly payments to your former employer and they can pay it on your behalf. You can definitely keep the account open, but eventually you'll want to roll it over.
Judy:
If you don't, it becomes a withdrawal and you pay tax on it.
Dick:
Well, they sure aren't to just tell you "don't bother paying it back, we'll do that for you".
Eva:
If you've lost your job and have an outstanding 401k loan, the remaining balance of the loan instantly becomes a distribution and you will be issued a 1099R for it. Rollover any amount that is remaining in your 401k to an IRA.

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