I have around $5000 in a tax sheltered annuity plan through national life group. I am still with the same school district, but have stopped contributing to the plan, and instead contribute to an ira. I would like to get the cash out if I can somehow.

My question is, what happens if I take a loan on the plan and just don’t repay it? Outside of the 10% penalty, and that money being taxed as income is there anything else I’m missing? Or any other consequences I haven’t seen?

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Werewolfdad t1_jeeyvdf wrote on March 31, 2023 at 3:03 PM

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You generally can’t just not pay it as the payments come from payroll

Cubby8 OP t1_jef6fxo wrote on March 31, 2023 at 3:52 PM

#2,535,622

Replying to Werewolfdad (#2,533,122)

So if I don’t pay, the plan administrator would essentially garnish my wages to pay it back? I just never read anything about that when I was researching. Thanks.

Werewolfdad t1_jef6t9y wrote on March 31, 2023 at 3:54 PM

#2,535,736

Replying to Cubby8 (#2,535,622)

You don’t have an option to not pay. It just comes out of your paycheck.

You give them authorization to deduct that as part of the approval process.

Cubby8 OP t1_jef9nuz wrote on March 31, 2023 at 4:13 PM

#2,536,666

Replying to Werewolfdad (#2,535,736)

Gotcha. That makes sense. I’ve never done anything like that and was curious. I just hate the fact that I was contributing to something with no growth potential and that money is just sitting there.

Werewolfdad t1_jefaxol wrote on March 31, 2023 at 4:21 PM

#2,537,038

Replying to Cubby8 (#2,536,666)

Your plan doesn’t have an option for non-annuity based investments?

Check out 403bwise.org for potential options

Cubby8 OP t1_jefhrc5 wrote on March 31, 2023 at 5:05 PM

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Replying to Werewolfdad (#2,537,038)

Ah thanks! I didn’t realize my district had other options.