u/Flimsy_Back6806

I took a $50000 loan from my workplace 401k just over a year ago. I have around $40k remaining and I’m paying $1000/ mo. All the payments and interest go back into my account. I am now over 55 and qualify for the Rule of 55. My thinking is I can quit my job, withdraw the remaining $40k from my 401k penalty-free and pay it right back to my 401k. I know I’ll take a tax hit on the withdrawal, but since I’m paying back the loan with after-tax dollars right now, it’s not really any different.

I’m sure this is a stupid idea, but I can’t see a problem with it. Help open my eyes!!