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Brown Cafe Community Center
Introductions and Welcomes
Can you take money out of your 401K for any reason? Or does it have to be a "hardship loan?"
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<blockquote data-quote="Jones" data-source="post: 3624391" data-attributes="member: 4805"><p><strong>Loan Rules</strong></p><ol> <li data-xf-list-type="ol">Maximum Loan Amount is limited to 50% of your vested account balance or, if lower, $50,000 minus the difference between the highest outstanding loan balance in the previous 12 months and the current outstanding loan balance.</li> </ol> <ol> <li data-xf-list-type="ol">Repaying an outstanding loan will not necessarily increase the amount permitted as a new loan.</li> </ol> <ol> <li data-xf-list-type="ol">Assets in the Self Managed Account (SMA) are included in the Loan Availability amount, but are not readily available.</li> </ol> <ol> <li data-xf-list-type="ol">SMA assets required for the desired loan amount will first need to be sold and transferred to the Core account before those assets can be used for the loan.</li> </ol> <ol> <li data-xf-list-type="ol">There is a $75.00 charge for each hardship loan. If the documentation you provide showing proof of hardship does not meet the requirements for processing, you will be charged an additional $75.00 each time the loan is reviewed.</li> </ol> <ol> <li data-xf-list-type="ol">Annual Processing Fee - $25 payable in quarterly installments of $6.25</li> </ol> <ol> <li data-xf-list-type="ol">Purchase of a primary residence.</li> </ol> <ol> <li data-xf-list-type="ol">Post-secondary education expenses.</li> </ol> <ol> <li data-xf-list-type="ol">To prevent eviction from or foreclosure on your primary residence.</li> </ol> <ol> <li data-xf-list-type="ol">Unreimbursed medical expenses.</li> </ol> <ol> <li data-xf-list-type="ol">Payment for burial or funeral expenses for your deceased parent, spouse, children or other dependents.</li> </ol> <ol> <li data-xf-list-type="ol">Expenses for the repair of any damages to your principal residence that would qualify for the casualty deduction for federal income tax purposes.</li> </ol> <ol> <li data-xf-list-type="ol">Adoption-related expenses.</li> </ol> <ol> <li data-xf-list-type="ol">You may have up to two loans outstanding at any time.</li> </ol> <ol> <li data-xf-list-type="ol">Repayment of your loan plus interest is made through after-tax payroll deduction.</li> </ol> <ol> <li data-xf-list-type="ol">You must repay the loan in full within 90 days after termination or it will be considered a taxable event, subject to all current taxes and any early withdrawal penalties.</li> </ol> <ol> <li data-xf-list-type="ol">Across all UPS sponsored plans in which participate or have participated, if you have/had an outstanding loan, it may impact your maximum amount for a new loan.</li> </ol> <ol> <li data-xf-list-type="ol">If you default on a loan, you will not be permitted to take another loan until the defaulted loan is repaid. The Plans default provision occurs 90 days from termination or missed payment.</li> </ol><p>You have up to 5 years to repay a non-residential loan and up to 20 years for a residential loan.</p><p></p><p><strong>Withdrawal Rules </strong></p><ol> <li data-xf-list-type="ol">Prior to age 59 1/2, you may take a hardship withdrawal for the following reasons:</li> </ol> <ol> <li data-xf-list-type="ol">Purchase of a primary residence.</li> </ol> <ol> <li data-xf-list-type="ol">Post-secondary education expenses.</li> </ol> <ol> <li data-xf-list-type="ol">To prevent eviction from or foreclosure on your primary residence.</li> </ol> <ol> <li data-xf-list-type="ol">Unreimbursed medical expenses.</li> </ol> <ol> <li data-xf-list-type="ol">Payment for burial or funeral expenses for your deceased parent, spouse, children or other dependents.</li> </ol> <ol> <li data-xf-list-type="ol">Expenses for the repair of any damages to your principal residence that would qualify for the casualty deduction for federal income tax purposes.</li> </ol> <ol> <li data-xf-list-type="ol">You must first exhaust all other loan and withdrawal possibilities before requesting a hardship withdrawal.</li> </ol></blockquote><p></p>
[QUOTE="Jones, post: 3624391, member: 4805"] [B]Loan Rules[/B] [LIST=1] [*]Maximum Loan Amount is limited to 50% of your vested account balance or, if lower, $50,000 minus the difference between the highest outstanding loan balance in the previous 12 months and the current outstanding loan balance. [/LIST] [LIST=1] [*]Repaying an outstanding loan will not necessarily increase the amount permitted as a new loan. [/LIST] [LIST=1] [*]Assets in the Self Managed Account (SMA) are included in the Loan Availability amount, but are not readily available. [/LIST] [LIST=1] [*]SMA assets required for the desired loan amount will first need to be sold and transferred to the Core account before those assets can be used for the loan. [/LIST] [LIST=1] [*]There is a $75.00 charge for each hardship loan. If the documentation you provide showing proof of hardship does not meet the requirements for processing, you will be charged an additional $75.00 each time the loan is reviewed. [/LIST] [LIST=1] [*]Annual Processing Fee - $25 payable in quarterly installments of $6.25 [/LIST] [LIST=1] [*]Purchase of a primary residence. [/LIST] [LIST=1] [*]Post-secondary education expenses. [/LIST] [LIST=1] [*]To prevent eviction from or foreclosure on your primary residence. [/LIST] [LIST=1] [*]Unreimbursed medical expenses. [/LIST] [LIST=1] [*]Payment for burial or funeral expenses for your deceased parent, spouse, children or other dependents. [/LIST] [LIST=1] [*]Expenses for the repair of any damages to your principal residence that would qualify for the casualty deduction for federal income tax purposes. [/LIST] [LIST=1] [*]Adoption-related expenses. [/LIST] [LIST=1] [*]You may have up to two loans outstanding at any time. [/LIST] [LIST=1] [*]Repayment of your loan plus interest is made through after-tax payroll deduction. [/LIST] [LIST=1] [*]You must repay the loan in full within 90 days after termination or it will be considered a taxable event, subject to all current taxes and any early withdrawal penalties. [/LIST] [LIST=1] [*]Across all UPS sponsored plans in which participate or have participated, if you have/had an outstanding loan, it may impact your maximum amount for a new loan. [/LIST] [LIST=1] [*]If you default on a loan, you will not be permitted to take another loan until the defaulted loan is repaid. The Plans default provision occurs 90 days from termination or missed payment. [/LIST] You have up to 5 years to repay a non-residential loan and up to 20 years for a residential loan. [B]Withdrawal Rules [/B] [LIST=1] [*]Prior to age 59 1/2, you may take a hardship withdrawal for the following reasons: [/LIST] [LIST=1] [*]Purchase of a primary residence. [/LIST] [LIST=1] [*]Post-secondary education expenses. [/LIST] [LIST=1] [*]To prevent eviction from or foreclosure on your primary residence. [/LIST] [LIST=1] [*]Unreimbursed medical expenses. [/LIST] [LIST=1] [*]Payment for burial or funeral expenses for your deceased parent, spouse, children or other dependents. [/LIST] [LIST=1] [*]Expenses for the repair of any damages to your principal residence that would qualify for the casualty deduction for federal income tax purposes. [/LIST] [LIST=1] [*]You must first exhaust all other loan and withdrawal possibilities before requesting a hardship withdrawal. [/LIST] [/QUOTE]
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Can you take money out of your 401K for any reason? Or does it have to be a "hardship loan?"
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