Can you take an in-service distribution from a 401(k) that already has a loan?
Client is over 59 1/2 and has in-service flexibility but currently has a $40k loan. Can she roll over part of her 401(k) plan without causing any issues with the loan?
Client is over 59 1/2 and has in-service flexibility but currently has a $40k loan. Can she roll over part of her 401(k) plan without causing any issues with the loan?
Permalink Submitted by Alan - IRA critic on Tue, 2021-03-16 21:16
Client needs to check with the current plan administrator to see if the plan allows this and if so what must be left in the plan. At best, it seem unlikely that the vested amount remaining in the plan could be less than double the loan balance since the max loan cannot exceed 50% of the plan balance.