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
401K Early Withdrawl Pen.
Jul 05, 2010
1 Replies
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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