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Started By
Message
re: 401k Loans
Posted on 6/5/13 at 7:05 pm to Vols&Shaft83
Posted on 6/5/13 at 7:05 pm to Vols&Shaft83
quote:.
If you not are not making contributions, not only is the entire balance that you borrowed missing out on any potential growth in the stock or bond markets, but each future contribution that you are unable to make (since you have a loan outstanding) isn't growing either
This isn't the case with all 401k plans. Some allow you to still realize the dividends on the amount you borrowed against. Also, just because someone takes out a loan doesn't mean they will stop contributing to the plan. That's just absurd.
1
Posted on 6/5/13 at 7:48 pm to JonTheTigerFan
quote:
Also, just because someone takes out a loan doesn't mean they will stop contributing to the plan. That's just absurd.
Referring you back to this
quote:
most plans have a provision that prohibits you from making additional contributions until the loan balance is repaid. Even if your plan doesn't have this provision, it is unlikely that you can afford to make future contributions in addition to servicing the loan payment. Because the whole point of having a 401(k) plan is to use it is as a way to save for the future, you are defeating the purpose of having this account if you use it before you retire.
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