For context, I took a $24k loan from my own 401k to supplement whatever cash I had on hand to make 20% down on a house back in early 2021 (got in right before the housing frenzy reached a peak, got a great interest rate and overall price on the house).
401k loan was 4.25% over 10yrs, figured it wasn't a big deal as the interest went into my pocket anyway.
I was paying about $200 a month from paycheck deductions, however, I got laid off around July 2022. This meant no more paycheck deductions and the loan becomes immediately due. Well not quite immediate, thanks to a bill passed in 2017, the loan amount is due this year when I file taxes.
I have the cash to pay this off, but now I can't figure out WHERE I deposit this lump sum that I owe (around 17K). Note that since I got laid off, I cannot make any more deposits to my old 401k. I plan on rolling this over once I figure out everything else.
I do have a new 401k through Vanguard with my new employer, and also an IRA that I manage through Vanguard separately. Should I just deposit the 17K into my new employer-managed 401k or my own IRA? Really don't want to get hit with the IRS penalties if this doesn't go through properly. No clue how this works, and searching online for this exact question didn't yield any results.
Also - lesson learned: definitely not messing with borrowing from my 401k again.
Any help is appreciated!
Submitted March 24, 2023 at 09:11PM by 401kayyy https://ift.tt/abXi4YN
