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How long to get a check from mercer for a 401k loan?
Once you make the request for your loan, it takes 2 business days to process the request. Unless you request otherwise, your check will then be mailed by First Class mail to you, which takes another 2-3 business days. You can, however, request an overnight shipment of the check using a UPS or FedEx account number that you provide to Mercer (call UPS or FedEx first to get this setup). All in all, you're looking at 3-5 business days.
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A loan is not income.
I have done this more than once. I believe it took me abt 2 weeks to get the check. But this will probably depend on whomever your 40lk is being managed by. There is also a 30…% fed tax penalty if you don't meet the age requirement for withdrawl. 20% is taken up front and the rest you are resp for paying. Also need to ck state/local... If you are still employed with the company, you may not be able to do this. You need to check your company policy. Unless you are in complete dire straits, I don't recommend doing this.
No. There are, however, three points at work here as follows: A 401(k) account is a retirement account that is generally protected from creditors. You are only allowed to a…ccess the funds at retirement or through loans where you are effectively borrowing money from yourself and paying yourself back that money with interest. Garnishing is a phrase that implies money being taken from income of some sort. A loan is not income, rather, a loan is just a way to get the use of some good/service (or cash) now by agreeing to pay it back (plus interest) at some later date. Putting this all together, a credit card company, if they get a judgment against you, could garnish your wages but would not be able to touch anything that has to do with your 401(k).
First, Never borrow from your 401k plan. You can pay off your 401k loan with money form any legal source. The money does not need to be deducted from your pay check. That… is the most convient method. To use money from an IRA, it would be necessary to take an UNQUALIFIED DISTRIBUTON from your IRA. If this is a Traditional IRA, the mney would be subject to income tax. And if you are not yet at the age of 59.5 years, a 10% penalty would be assessed on the amount taken from the IRA. This 10% would need to be paid when you file your income tax return. If this is a ROTH IRA, there are some different rules. Distributions from a ROTH IRA come out in an ordered fashion. - First to come out is our annual contribution amounts. These amounts come out free from tax and free from penalty. - Second to be distributed from a ROTH IRA is our Conversion Contributions. Conversion amounts are distributed tax free. A 10% penalty may apply if the conversion is less than 5 years old. Each Conversion has it's own 5 year clock. - Last to come out is earnings. If the ROTH IRA owner is younger than 59.5 years, the earnings will be taxed and the 10% penalty will apply.
Yes, only if you are taking the loan from a 401(k) with your current employer, but the loan may only be used for the following specific actions: * Education expenses for self…, spouse or dependent child * Eviction prevention from principal residence * Medical expenses that may not be reimbursed * First-time purchase of a principal residence Most 401(k) plans allow the owner to take a loan out (despite being a legal feature of the plan, the cost to administrate loans is usually too high for some businesses and they choose NOT to allow the feature) for specific reasons. There are limitations on the minimum and maximum amounts borrowable and payments must usually be made through payroll deductions. If you have a 401(k) with an employer that you no longer work for, they will not typically allow you to take a loan.
No. No. There are, however, two points at work here as follows: A 401(k) account is a retirement account that is generally protected from creditors. You are only allowed …to access the funds at retirement or through loans where you are effectively borrowing money from yourself and paying yourself back that money with interest. Garnishing is a phrase that implies money being taken from income of some sort. Putting this all together, a loan company, if they get a judgment against you, could garnish your wages but would not be able to touch anything that has to do with your 401(k).
The penalty is 10%. All in all you will pay your tax bracket + 10%. Actually that is incorrect. The question was about a 401k loan. There are no taxes on 401k loans unless yo…u default on the loan. If the loan defaults then yes you would owe 10% penalty plus Federal and State taxes at tax time.
Answer . I had a client in the same situation. (I assume you are the person who took out the loan on your own 401(k) ). When the rollover took place, the amount of the o…utstanding loan was deducted from the rollover amount. So the loan was paid off when the rollover was made. . As a broad example, if you had a 401(k) with $10,000 in it, and had a loan of $1,000 against it, the rollover would be for $9,000.. So, your steps are (1) open a Rollover IRA and (2) contact your 401(k) administrator and ask for rollover paperwork.
then the distribution amount will be counted as income to you for that yr, you will be receiving 1099 form
In a word Don't. If you do you will have a penalty (10%) and they will treat the distribution as income (which is taxed at whatever your rate is) But for us taking a 401k lo…an two years ago was really smart. Me and my wife took out a $5000 loan from the 401k and paid off a 14% interest rate car loan. Those mutual funds that were sold to get that $5000 are today worth $4200 (two years later) And the amount we will save between not having to pay full coverage insurance and the interest on the car note is quite a bit of money. Worked so well earlier this year we took out another $6000 to pay off a 16% interest rate SUV loan. Those funds are worth $5500 now and we have saved quite a bit in interest and not having to pay for full coverage insurance on that vehicle as well. I took out a third loan to settle a $6000 credit card for $3500 a savings of $2500 (not to mention I won't get sued) I'm not saying that taking out 401k loans are perfect for everyone. But, we were in a lot of stupid debt. Now we have two paid off cars (and we will never finance another one ever again !!) and we have paid off all of our credit card debt. And the only interest we pay now is to ourselves!!! Actually the prior provided answer below is incorrect. I have left the incorrect comment below (indented) for documentation. In reality, money used to pay back a 401k loan comes in two parts just like any loan repayment (principal and interest). The principal paid back is not taxed twice. To understand this you simply have to do the follow through math on your income over the years vs. how much you paid in taxes once you finally withdraw the money. So in this example, the 14,000$ is not taxed twice. However, interest paid on the loan is considered income to the 401k and this is NEW money going into the 401k. This interest is taxed twice because it is NEW money. You pay it in after tax dollars but unlike the principal, you did not get to use untaxed dollars to offset this. So assuming the 25% tax rate stated below, the answer below is only 25% correct. This is a common mis-understanding. Only the interest paid on a 401k loan is taxed twice, not the re-paid principal. To say that the principal paid back is paid back using after tax dollars is not correct. Here is a simple example to illustrate: assume you have 50,000$ in the bank that has been taxed. You then borrow 50,000$ from your 401k. You now have 50,000$ in the bank on which you paid taxes and 50,000$ on which you did not pay taxes. Now you change your mind and immediatlely pay off the 401k loan with 50,000$. Hmm... did you use 50,000$ taxed or 50,000$ untaxed go pay the loan. Let us see. Before this silly (but legal) sequence of events you had 50,000$ in untaxed money in your 401k and 50,000$ of taxed money in the bank. After wards you (oh gee) had 50,000$ of untaxed money in your 401k and 50,000$ of taxed money in the bank. How about that... nothing is different. As you can see, there is no change in your tax situation at all. Principal paid back to a 401k is not taxed twice. I love the extremes of questions. They are so good at clarifying things. If you are not getting it, think about it a bit, you will. The author of the below would have us believe that we used the 50,000$ of taxed money to pay back the loan. If we follow that logic then there is still no difference since from that point of view you have simply reversed the locations of the money, not it taxed status. In the end you still have 50,000$ of untaxed money on one place and 50,000$ of taxed money in another place. Additionally, none of this really matters. A 401k is just another money pool with a specific set of rules. The point of taking money from a 401k is to use it smarter than the 401k will. If you get more from the money you take out than you lose, then it is a good move, that is all there is to it. In evaluating a loan (OR EARLY WITHDRAWAL) from a 401k you need to do two things: 1) do the math to know what it costs you vs. what you make with the money once you get it. You want to know this even if it is not your driving factor for taking the loan (or withdrawal). 2) weigh the intangibles somehow. Borrowing from a 401k is usually done for a purpose that cannot be accommodated otherwise. Consider an example: your daughter wants to go into the medical field. Let us assume she has two choices, be a Nurse or be a Doctor. You have the money to send her to 4 year nursing school in the bank, but you need more to make her a doctor. Your 401k can provide the extra funds needed? Do you take the loan? Some people would try to figure out the extra money she makes as a Doctor vs. a Nurse into the equation in order to justify it. Others would see that in this case the finances are immaterial. The jobs of Nurse and Doctor are different and will lead to completely different life styles for your daughter. Which life do you want your daughter to live, the life of a Nurse or the life of a Doctor? If you want to give her a shot at beign a Doctor, then you take the loan. What the loan costs may be important but is secondary to your primary goal in this case. Below is the prior incorrect answer. This doesn't give the whole picture. Loan repayments are made with after tax dollars from your paycheck, but get deposited in the 401k as pretax money. So when you retire, you pay taxes on all that money again. In the case above, the person has taken out a total of $14,000. Estimate the interest they paid themselves and we're talking a total of approximately $18,000. That $18k was already taxed at a conservative rate of 25% for federal, state, and local taxes. That means their pretax loan payments comes to $24,000. That's a $10,000 difference. That's a lot of money "missing". Also consider that the $18,000 that this person took as a loan has already been taxed at 25%. When they retire/quit and take their money out of their 401k, they have to pay 25% AGAIN on that money. That's another $4,500 (potentially more if they are under 59.5) they are paying to the IRS.
Yes you can. it would be half of what you took out on the amount of your first loan. the interest is the same. take my advise...only take the loan if you really need it and pa…y back as soon as possible. I had to do it because I was overwhelm with high credit card interest. I caught up and pay back early. it's your money, you can do whatever you want Tiffani
NEWS ALERT: YOUR IN BANKRUPTCY...YOU HAVE TROUBLE HANDLING FINANCES, You have more debt than you can handle...COMMON SENSE: BORROWING MORE CANNOT GET YOU OUT OF DEBT. … Don't do it, don't do it, don't do it! Your 401k is exempt from seizure under virtually all circumstances...including bankruptcy. (Example...OJ Simpson, owed a lot to the Browns after they won the wrongful death suit....they could take his Heisman trophy, his cars, his future income from autograph signings, etc, etc....and did and continue to. As a judgement, he can't even escape it through BK. But, they can not touch his multi million dollar 401k/IRA.) If you take a loan against the 401k, the money is no longer protected...it can and will be taken by creditors...given the opportunity....and since your already in serious financial problems now... it's highly possible that can come about. Then your left with a new debt to pay off, that uses up your 401k....and nothing else. Well, something else - you'll have a big new tax bill and debt, because not paying back the loan of the 401k is the same as withdrawing it...so you pay a penalty on the early withdrawal and everything becomes income! (Rule of thumb, depends on State, but when it becomes a withdrawal, which happens many, many ways, you should consider tax and penalty to be @40% of what you took out). Don't do it, Don't do it, Don't do it! Now...as maybe a more direct answer: There probably isn't a law against your borrowing from the plan. However, depending on your BK, especially in a C13 though, you agreed to only make financial changes with the approval of the trustee. Failing to do so is almost always responded to first by the BK protection being ceased, and sometimes by fraud charges because not keeping your promises to the court falls under that. Finally, the trustee has a right to the funds when taken out and would want them to pay the creditors in the order required by law/the plan.
Getting a 401k loan can have a lot of negative impact on a person's life. One reason why a person shouldn't consider getting a 401k loan is because a person would have to pay …taxes on this loan twice after its been paid back. The first tax comes from a person personal income. The second tax that this person would have to pay is after this person reach retirement this person needs to pay taxes on the money they decide to withdraw from their banking account. As a result a person who borrow this much money will have to pay lots of taxes on this particular loan.
Title 20, United States Code, section 1095a: "(a) Garnishment requirements Notwithstanding any provision of State law, a guaranty agency, or the Secretary in the case of loans… made, insured or guaranteed under this subchapter and part C of subchapter I of chapter 34 of title 42 that are held by the Secretary, may garnish the disposable pay of an individual to collect the amount owed by the individual, if he or she is not currently making required repayment under a repayment agreement with the Secretary, or, in the case of a loan guaranteed under part B of this subchapter on which the guaranty agency received reimbursement from the Secretary under section 1078(c) of this title, with the guaranty agency holding the loan, as appropriate, provided that - (1) the amount deducted for any pay period may not exceed 10 percent of disposable pay, except that a greater percentage may be deducted with the written consent of the individual involved; (2) the individual shall be provided written notice, sent by mail to the individual's last known address, a minimum of 30 days prior to the initiation of proceedings, from the guaranty agency or the Secretary, as appropriate, informing such individual of the nature and amount of the loan obligation to be collected, the intention of the guaranty agency or the Secretary, as appropriate, to initiate proceedings to collect the debt through deductions from pay, and an explanation of the rights of the individual under this section; (3) the individual shall be provided an opportunity to inspect and copy records relating to the debt; (4) the individual shall be provided an opportunity to enter into a written agreement with the guaranty agency or the Secretary, under terms agreeable to the Secretary, or the head of the guaranty agency or his designee, as appropriate, to establish a schedule for the repayment of the debt; (5) the individual shall be provided an opportunity for a hearing in accordance with subsection (b) of this section on the determination of the Secretary or the guaranty agency, as appropriate, concerning the existence or the amount of the debt, and, in the case of an individual whose repayment schedule is established other than by a written agreement pursuant to paragraph (4), concerning the terms of the repayment schedule; (6) the employer shall pay to the Secretary or the guaranty agency as directed in the withholding order issued in this action, and shall be liable for, and the Secretary or the guaranty agency, as appropriate, may sue the employer in a State or Federal court of competent jurisdiction to recover, any amount that such employer fails to withhold from wages due an employee following receipt of such employer of notice of the withholding order, plus attorneys' fees, costs, and, in the court's discretion, punitive damages, but such employer shall not be required to vary the normal pay and disbursement cycles in order to comply with this paragraph; (7) if an individual has been reemployed within 12 months after having been involuntarily separated from employment, no amount may be deducted from the disposable pay of such individual until such individual has been reemployed continuously for at least 12 months; and (8) an employer may not discharge from employment, refuse to employ, or take disciplinary action against an individual subject to wage withholding in accordance with this section by reason of the fact that the individual's wages have been subject to garnishment under this section, and such individual may sue in a State or Federal court of competent jurisdiction any employer who takes such action. The court shall award attorneys' fees to a prevailing employee and, in its discretion, may order reinstatement of the individual, award punitive damages and back pay to the employee, or order such other remedy as may be reasonably necessary. (b) Hearing requirements A hearing described in subsection (a)(5) of this section shall be provided prior to issuance of a garnishment order if the individual, on or before the 15th day following the mailing of the notice described in subsection (a)(2) of this section, and in accordance with such procedures as the Secretary or the head of the guaranty agency, as appropriate, may prescribe, files a petition requesting such a hearing. If the individual does not file a petition requesting a hearing prior to such date, the Secretary or the guaranty agency, as appropriate, shall provide the individual a hearing under subsection (a)(5) of this section upon request, but such hearing need not be provided prior to issuance of a garnishment order. A hearing under subsection (a)(5) of this section may not be conducted by an individual under the supervision or control of the head of the guaranty agency, except that nothing in this sentence shall be construed to prohibit the appointment of an administrative law judge. The hearing official shall issue a final decision at the earliest practicable date, but not later than 60 days after the filing of the petition requesting the hearing. (c) Notice requirements The notice to the employer of the withholding order shall contain only such information as may be necessary for the employer to comply with the withholding order. (d) No attachment of student assistance Except as authorized in this section, notwithstanding any other provision of Federal or State law, no grant, loan, or work assistance awarded under this subchapter and part C of subchapter I of chapter 34 of title 42, or property traceable to such assistance, shall be subject to garnishment or attachment in order to satisfy any debt owed by the student awarded such assistance, other than a debt owed to the Secretary and arising under this subchapter and part C of subchapter I of chapter 34 of title 42. (e) "Disposable pay" defined For the purpose of this section, the term "disposable pay" means that part of the compensation of any individual from an employer remaining after the deduction of any amounts required by law to be withheld." (emphasis added) My guess is that amounts already in your 401(k) should be safe from action made pursuant to this statute because your 401(k) is a personal asset and not "disposable pay" per 20 U.S.C. §1095a(e). Prospectively, however, amounts directed by your employer into your 401(k) are not safe as these amounts would be considered disposable pay, as they are not amounts required by law to be withheld and would be required to be sent by your employer directly to the creditor. The federal government also gets a cause of action to sue you on the note. A judgment lien obtained there can be collected as any ordinary judicial lien can be foreclosed. All they have to do is go to proceedings in aid of execution and you have to disclose your assets, including your 401(k). Then all they have to do is satisfy the lien out of the proceeds, which means they get a court order ordering the institution holding the account to pay over.
What is the usual amount of time it takes for a 401k loan check to arrive in the mail once it has been processed and sent out?
5-7 mailing days is standard
Taking a loan through a work retirement plan means you're borrowing a portion of the money in your account and paying yourself back. Retirement plans offered th…rough work, including 401(k) plans, are not legally required to offer loans - with the exception of the federal government's Thrift Savings Plan that legally must offer loans under specific circumstances. Among work retirement plans that do offer loans, there are typically two loan categories: General loan - can be taken for any reason and must be repaid within five years Principle residence loan - for the purchase of a home you intend to live in full time; Repayment terms are typically extended to a maximum of 10 years and the employer may require documentation proving the funds were paid toward the purchase of a primary residence.