I Was Furloughed. Under the CARES Act, Do I Still Need to Pay My 401(k) Loans?

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Do you have questions about your money? Odds are high that you do.

How do we know that? Because each and every day, my email inbox is filled with questions about money from readers.

What should I do with my IRA? How should I invest the money in my 401(k)? Should I do a Roth IRA conversion? What’s the best way to roll my 401(k) over into an IRA? When’s the best time to claim Social Security or enroll in Medicare?

And the list goes on and on and on. Well, you’ve got questions. We’ve got answers.

Today we are launching a new series called Ask Bob. With the help of experts in insurance, taxes, investments, estate planning, employee benefits, and of course, retirement we’ll answer your most pressing money questions.

In our first segment, Denise Appleby, CEO of Appleby Retirement Consulting, helps us answer a reader’s question about the Cares Act and whether it’s okay to stop making payments on a 401(k) loan while furloughed.

“I've read conflicting information on this,” writes our reader. “Some sites say the loan must either be new or have the balance due before the end of the year. Can you clarify this? I obviously would like to not have to pay $520 a month while I'm furloughed.”

Well, according to Appleby, it depends on whether your employer’s 401(k) plan allows you to do that or not. To learn that, speak with someone in your employee benefits department. 

By the way, if you can’t stop making payments, consider joining forces with fellow employees who might be in the same position as you and sign a petition asking your employer to amend the plan. It might work. It might not. But there’s no harm in trying, especially during these trying times.

Got questions about money? Get answers. Email Robert.Powell@maven.io

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