There are two different methods of modeling a 401(k) loan, depending on whether it is an existing loan, or a new loan.
To model an existing 401k loan:
- Head to Profile > Net Worth > Investments and open the 401(k) account. Select the 'Loan outstanding' option.
Model the loan details that appear within the account.
To model a new 401k loan:
- Add a 'Distribution' Income card within the Profile > Income tab; set the Type as '401(k) loan;' and choose the appropriate 401k in 'From Account.' This will pull funds from the client's 401k in the Profile > Net Worth tab, and distribute it as income within the plan.
The system will automatically generate an amortization schedule based on the loan details.
Additional Information
For more details on modeling 401(k) loans, please see the links below:
