[quote=flu]Since we’re on the topic of taxes… I got a new scenario for folks to figure out… (I don’t know the answer)…
1. Suppose you borrowed $50k from your traditional 401k…
2. Suppose you also have a Roth 401k….
Now you decided you want to pay back your 401k because you don’t want an outstanding loan… BUT, you really don’t want your total 401k (both traditional and roth account) value to really increase by $50k… (for sake of argument, you feel you don’t want to put $50k back into the stock/bond markets)…
Can you withdraw from your Roth 401k $50k, ALL from CONTRIBUTION portion without incurring a tax (since it was money you contributed after taxes)… and use that money to payback off the outstanding loan on your traditional 401k….[/quote]
It all depends on your 401k. I’m not sure if you can withdraw from ROTH 401k (even if it’s just the contribution part). Maybe your 401k allow it, but mine only allow a hardship withdrawal while I’m still working for the company. However, my 401k rock in a sense that it allow me to be in cash. You might see if that option is for you and you can put in $50k and just leave it in cash if you don’t want to be in the market.
