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401k loan

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Last Updated On
ByBarbara

L1: 401k loanI took a loan on my 401K 2 years ago. September 2005 I turned 55, retiring after I turned 55. After I retired, I continued to make payments on the loan. This year, I want to discontinue making the payment and let it default and receive a 1099. The plan says it will have a code “1”. Would the IRS allow the exception rule that I took distribution after tunring 55 and retiring as it did not default until after attaining age 55 and retiring? I called and asked the IRS and they are clueless.2006-03-21 20:04, By: Barbara, IP: [70.56.183.63]
L2: 401k loanPlans typically allow what is called a post 55 withdrawl and this can be done without penalty. If the penison or 401k does not know about this call back and ask for a manager. Essentially you are defaulting on your loan and paying ordinary income tax with no penalty.2006-03-21 20:38, By: dezzi, IP: [68.233.152.174]

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