Loan Request
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If your plan allows loans you may borrow form your account. If you are unsure of the rules of your plan regarding loans, please request a
Summary Plan Description. |
| In general,
if your plan allows loans, you may borrow 50% of your vested
account balance to a maximum of $50,000.00. You may only have
one (1) loan at a time and you must repay the loan through after
tax salary withholding. You must repay the loan within (5) years,
unless you are using the money for the purchase of a primary
residence. For purchase of a primary residence you may take
up to thirty (30) years to repay the loan, however, you must
provide documentation showing the home purchase. |
| These are only general rules, your plan will have specific rules concerning loans. An SPD will be provided to show you the exact rules pertaining to your plan. |
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Request an SPD |
| Loans are
subject to a $75.00 processing fee. This fee will
be charged to your credit card. |
| Please remember these three issues concerning loans: |
- Opportunity Cost: if you withdraw money for a loan you will lose the opportunity that money would have to grow in your investment.
- Double Taxation: loans are repaid with after tax money. When you retire and start to withdraw your money it will be subject to income tax on all withdrawals, including your loan payments (second taxation).
- Loan Default: if you fail to repay your loan you will be subject to a “deemed distribution” creating taxes and penalties.
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This loan calculation is only for illustration purposes. The actual loan specifications are determined by the plan rules and actual funds available to borrow. |
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Beacon Benefits, Inc. will provide the documents to process your loan. The documents will be either for the amount requested or the maximum allowed, if lower than your request.
Please remember your employer must authorize all withdrawals from the plan. |
