Alert
Close

Top the Trizzle leaderboard by 5 p.m. Friday to win a $100 gift card! Learn more

Highlights

Open

most popular
ARTICLES

Viewed

work
PROGRAMS

Best Employers for Workers Over 50

See the latest winners of this AARP recognition program.

National Employer Team

See which companies value older workers.

Employer Resource Center

Attract and retain top talent in a changing workforce.

Ask the Experts: When a Layoff Catches You With a 401(k) Loan

Q. I was just told I’m going to be laid off. What happens to the money I borrowed from my 401(k)? I haven’t paid it back in full yet.

A. When your job is terminated, any money that was borrowed from your 401(k) account becomes due, usually within 60 days. If you cannot afford to pay it back, the amount you owe will be treated as an early withdrawal if you’re younger than 59½. It will be taxable and you’ll owe a 10 percent penalty—except in certain circumstances. For example, if you’re at least 55 years old or disabled, the penalty won’t apply.

Carole Fleck is a senior editor at AARP Bulletin.

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

Jobs You Might Like

Jobs You Might Like

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

UPS

Members get 15% off eligible products/services and 5% off shipping at The UPS Store®.

AARP Discounts on Consumer Cellular Phones and Plans

Members save 5% on monthly service and usage charges with Consumer Cellular.

Member Benefits

Renew today! Members receive exclusive member benefits & affect social change.

Explore Your Learning Possiblities