I'm trying to find some basic answers here but having a very hard time. I have a job currently and I'm about to lose it. I have pulled out a 401k loan and paying it back through the payroll deduction.
What I'm trying to find out is what happens once I quit my job? Let's say I have a 38,000 loan and I have about 97,000 in the plan total.
Let's say I quit my job, I call Vanguard tell them I just lost my job, can you treat the 38,000 as a withdraw? So it would be 97000 - 38000 = 59,000? Can I then with draw the remaining balance, and use the entire amount towards taxes?
I looked at my Vanguard plan information, and it does not have anything regarding this question. Even calling them doesn't seem to ease my question since they're giving me multiple answers. A couple of times they said I could call after leaving my job, tell them to treat the 38000 as a withdraw then use the remaining balance to pay the taxes and penalties.
Is that true?
I know this isn't the smartest option but I just need to know.