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Pension topics: Consider rolling over a loan

Posted 4/8/22

Q: I’m a Tier 1 member of the Teachers' Retirement System of the City of New York. I plan to retire in about 2-3 years. At that time, I will have more than $400,000 in my annuity savings account (TRS pension plan). Is it wise to take a maximum loan when I retire? N.P.

A: Loans taken at or near retirement are taxable distributions because they are never paid back. You may defer the tax by rolling the amount into a traditional (pre-tax) IRA. Pre-age 72 distributions are taxable. Taxable Required Minimum Distributions start at age 72.

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