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MrsGT
LIF Infant
Member since 9/08 51 total posts
Name:
J
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Big Uh Oh
2 Months ago DH took 30,000 out of his 401K to help with a down payment. The deal fell through and he wanted to return the money. He felt that he took it out under the contract for a home that he is no longer purchasing and it was best to return it. His broker, Fidelity, advised him that he can take it out again when he gets into another deal but that he should return the current money after it goes into loan status and he is in the re-payment phase. So, he waited 2 weeks like they said to do. And on his first due date, he sent in the 30,000. FAST FORWARD: We have another house that we're bidding on and need his 401K money. He tried to initiate the loan today and was told that he has to wait a full 12 months before he can take another loan from it. ***? We can't wait a full year to buy a house because of our situation. Not to mention that the market will be less buyer friendly a year from now. What is 30,000 in a dwnpayment now might only be 15 or 20 next year. This is a really bad situation. And I'm beyond angry at Fidelity for advising him wrongly. And beyond frustrated with DH for putting the money back when we were actively house hunting. Any suggestions? If not, thanks for reading my vent. 
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Posted 10/20/08 5:25 PM  |
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Sandy55
My family ROCKS!!!
Member since 2/08 1219 total posts
Name:
Sandy
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Re: Big Uh Oh
Hi.
Sorry i don't really have any monetary suggestions, but how do you know the market will be less buyer friendly next year? It may not be. Can you save some money for a year?
Message edited 10/20/2008 5:39:23 PM.
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| Posted 10/20/08 5:39 PM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Big Uh Oh
Not much you can do if thats in the terms of his 401k documents.
That's strange that they only allow one loan every year. I would call them up and complain.
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| Posted 10/20/08 5:44 PM |
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CookiePuss
Cake from Outer Space!
Member since 5/05 14021 total posts
Name:
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Re: Big Uh Oh
Posted by ave1024
Not much you can do if thats in the terms of his 401k documents.
That's strange that they only allow one loan every year. I would call them up and complain.
Is the $$$ in a current 401k or in a rollover IRA?
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| Posted 10/20/08 7:29 PM |
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MrsGT
LIF Infant
Member since 9/08 51 total posts
Name:
J
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Re: Big Uh Oh
Is the $$$ in a current 401k or in a rollover IRA?
it's in a 401K.
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| Posted 10/21/08 7:31 AM |
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suvenR
designer mutt
Member since 5/05 4239 total posts
Name:
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Re: Big Uh Oh
Usually the plan sponsor (his employer) determines how often loans can occur. They would do this when setting up the 401k plan. Fidelity wouldn't necessarly know the rule off hand because it will be different from employer to employer.
Does your DH have someone in HR who can help him?
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| Posted 10/21/08 9:05 AM |
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MrsGT
LIF Infant
Member since 9/08 51 total posts
Name:
J
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Re: Big Uh Oh
Fidelity told him that the IRS prohibits him taking out this loan more than once in a 12 mos. period. Based on my limited knowledge of tax codes, this doesn't even make any sense. Plus the IRS.gov site mentions nothing of the sort.
It's a great idea to check with his employers HR dept. Thank you for that suggestion!
Right now he has filed a formal complaint with Fidelity because he feels he was wrongly advised. They are pulling the taped phone records to determine if this is true. We honestly can't stay where we are for more than a year. UGH.....
Message edited 10/21/2008 9:15:57 AM.
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| Posted 10/21/08 9:15 AM |
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CookiePuss
Cake from Outer Space!
Member since 5/05 14021 total posts
Name:
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Re: Big Uh Oh
Posted by MrsGT
Fidelity told him that the IRS prohibits him taking out this loan more than once in a 12 mos. period. Based on my limited knowledge of tax codes, this doesn't even make any sense. Plus the IRS.gov site mentions nothing of the sort.
It's a great idea to check with his employers HR dept. Thank you for that suggestion!
Right now he has filed a formal complaint with Fidelity because he feels he was wrongly advised. They are pulling the taped phone records to determine if this is true. We honestly can't stay where we are for more than a year. UGH.....
They may be confusing it with IRS code that only allows you to make an early withdrawal and return the money within 60 days in regards to an IRA. That is limited to once during any rolling 12 months. I would check with his HR dept to find out what the plans says.
Message edited 10/21/2008 9:35:42 AM.
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| Posted 10/21/08 9:35 AM |
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