401K Early Withdrawl Pen.


B

bh2os

My brother took a 401K loan at age 57, lost his job at 61 with an
outstanding loan balance. Will he have to pay a penalty for early
withdrawal since he did withdraw before 59.5?

tks all

bw
 
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A

Alan

My brother took a 401K loan at age 57, lost his job at 61 with an
outstanding loan balance. Will he have to pay a penalty for early
withdrawal since he did withdraw before 59.5?

tks all

bw
There is no early withdrawal penalty. At the time he defaulted, the
outstanding balance was considered a taxable distribution for that year.
As he had already attained age 59 1/2 in that year, ... no penalty.
 

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