Scribd Logo
Upload

Welcome to Scribd!

  • 163 views

    CTA 401 (K) and 457 (B) Retirement Loan Information

    Uploaded by

    Chicago Transit Justice Coalition
    A new feature to allow CTA workers who need loans before attempting a hardship withdrawal. It is not recommended to do this by most financial advisors. However, it does demonstrate the dire financial situation that many CTA workers face. It may be necessary for some.

    Copyright:

    Public Domain
    Download as PDF, TXT or read online from Scribd

    CTA 401 (K) and 457 (B) Retirement Loan Information

    Uploaded by

    Chicago Transit Justice Coalition
    163 views2 pages
    A new feature to allow CTA workers who need loans before attempting a hardship withdrawal. It is not recommended to do this by most financial advisors. However, it does demonstrate the dire financial situation that many CTA workers face. It may be necessary for some.

    Original Title

    CTA 401(k) and 457(b)Retirement Loan Information

    Copyright

    © Public Domain

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    A new feature to allow CTA workers who need loans before attempting a hardship withdrawal. It is not recommended to do this by most financial advisors. However, it does demonstrate the dire financial situation that many CTA workers face. It may be necessary for some.

    Copyright:

    Public Domain
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    163 views2 pages

    CTA 401 (K) and 457 (B) Retirement Loan Information

    Uploaded by

    Chicago Transit Justice Coalition
    A new feature to allow CTA workers who need loans before attempting a hardship withdrawal. It is not recommended to do this by most financial advisors. However, it does demonstrate the dire financial situation that many CTA workers face. It may be necessary for some.

    Copyright:

    Public Domain
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    )

    New Feature!
    EMPOWER
    Effective 1/1/24

    Taking a loan from your 401(k) or


    457(b) Retirement Plans
    Taking a loan from your 401(k) or 457(b) retirement plan can provide the financial lifeline you need when you incur a large and
    unexpected debt. But tapping into your retirement account is a step you shouldn't take lightly, and you should carefully consider the
    perks
    and costs,

    Perks Think ahead


    « There is no loan application and no impact on your Carefully consider the costs — and the perks — before
    credit score or credit report. requesting
    a retirement plan loan. Doing
    so can make

    - You are borrowing against your own savings. a big difference in your future financial security.

    * Taking a loan from your plan account may be


    cheaper than borrowing from a bank.
    Ready
    to act?
    ~ Interest paid is paid back to yourself!
    Log in to your account at empower.com/cta. (If you
    + You won't pay income tax or a penalty
    on the
    haven't yet created an online account, click Register for
    withdrawn amount. online access.)

    - The IRS does not require you to pay income tax Contact the Customer Care Center at 1-833-282-1CTA (1-833-
    if your loan is repaid on time. 282-1282) weekdays from 8 a.m. to 10 p.m. Eastern time.

    This option involves speaking with a representative on


    Costs
    a recorded line. Depending on call volumes, you may
    Lost savings
    experience longer wait times.
    » You will not accumulate potential earnings on the amount taken
    out of your account via a loan.
    « Aloan must be taken before you can request a hardship
    withdrawal.

    Default
    » If you leave employment before paying off your loan, any
    unpaid balance after 90 days from termination will be
    subject to federal income tax and, if applicable, state tax.
    An early withdrawal penalty of 10% may also apply.

    CTA 401(k) and 457(b) Retirement Plans


    401(k) or 457(b) Retirement Plan: Loan Program

    Features of the loan program

    General purpose loan: | — 5 years


    Loan types/Loan terms
    Principal residence loan: 6 — |5 years

    Loan minimum $1,000

    The maximum loan available is the lesser of 50% of your vested account balance
    Loan maximum
    or $50,000.

    Loan rate based on the Prime rate* + 2%.

    Rate fixed for term of loan.


    Loan interest rate/calculation

    All interest is repaid to your account and allocated to your account per your
    current investment election.

    Repayment occurs via payroll deductions on an after-tax basis.

    Early repayment (in full) is allowed (money orders or certified checks onl)
    Loan repayment

    Repayments are returned to your account according to your current


    investment election.

    Limit on number
    One active loan at a time.
    of outstanding loans

    Loan fees $75 loan origination fee, deducted from loan proceeds; $6.25 maintenance fee, assessed quarterly.

    Customer Care Center 1-833-282-1CTA (1-833-282-1282)

    Website mpower.

    If you separate from service before paying off your loan, any outstanding loan balance is due in full or offset as deemed distribution and tax reported
    a

    after 90 days from termination. The outstanding loan balance is tax reported in the calendar year incurred via form 1099R. Loans taken from a 401 (k)
    Plan may also be subject to an early withdrawal penalty of 10%.

    *As published in the Wall Street Journal. Rate changes are effective on the first day of the following month from the Prime rate being published.

    Securities, when presented, are offered and/or distributed by Empower Financial Services, Inc., Member FINRA/SIPC. EFSI is an affiliate of Empower
    Retirement, LLC; Empower Funds, Inc; and registered investment adviser, Empower Advisory Group, LLC. This material is for informational purposes only and is not intended to
    provide investment, legal, or tax recommendations or advice.
    "EMPOWER" and all associated logos and product names are trademarks of Empower Annuity Insurance Company of America.

    ©2023 Empower Annuity Insurance Company of America, All rights reserved, RO3249747-| 123

    You might also like