“If you have a loan balance on your existing 401k — if you leave your job and still have a loan balance, that balance has to be paid immediately — usually by your 401k,” Bradley said.
Josh Bradley of Captial City Financial Partners explained what to take into account in this situation.
Of course, you have the ability to cash out your 401k as well.
Bradley also hinted at the hazards you should be aware of.
Luckily, there is no time frame when leaving a job. You have the ability to leave it there indefinitely.
“The biggest hazard we see is the cash-out option,” Bradley said. “Most people when they leave jobs cash that out. That could end up costing them thousands and thousands of dollars between penalties, taxes, and lost retirement money that you won’t have in the future.”
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