Question My wife and I borrowed money from our individual 403b retirement accounts to purchase a home. We were making payments every 3 months. There was a 60 day grace period. My wife lost her job and we fell behind on all of our bills. We weren't 60 days late with the 403b payments, but not on time and they stopped sending statements. This lead to my account being only a few days late and they immediately defaulted and turned the account into the I.R.S. as income. Same thing happened to my wife's account. We have already paid the tax hit on both accounts, but they want us to keep paying on this account. I was told if I didn't, they would hit me hard when I retire to recoup their money. First question is, can I transfer this account to another company to avoid this "hit" and second, if I payed this money back, wouldn't I be taxed twice? The money I'm paying back is from already taxed money (after tax paycheck).
Not really understanding some of the logistics. However, when you took a loan from your 403(b) you were loaned your own money. This was a loan from yourself. It is customary that once the account owner loses their job with the employer providing the 403(b or 401(k), that it will be considered a "default" and you will receive a 1099R for the amount of loan still left to repay and is counted as income. I would go ahead and do a rollover of the account into an IRA anyways, but even if you do not, based on what info you provided, you would have no more need to pay back the loan to the 403(b).
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Publications Seminole Success Magazine “Retirement Planning”
Seminole Success Magazine “Small Business Snapshot”
The Orlando Sentinel – Ask the Expert Financial Section (Various)
Greater Orlando Broker Agent Magazine “The New It”
Senior Market Advisor “Random Reader, Random Questions”
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CFP Certificate, University of Central Florida, Orlando, FL