The problem with this thread is that everyone assumes 401k loans function the same way in every plan
This is true, in my plan you dont have to stop contributions and the biggest potential downside is that whatever principal value thats been loaned out is not gaining(or losing for that matter) along with the other invested monies. The interest rate on that allotment is simply what interest rate you are paying for the loan. Its entirely conceivable that in the tough times your "payment to yourself" will be greater than the actual market return. Sure, you'll pay taxes at retirement on money paid in loan interest thats already been taxed once before. That's a cross I'm willing to bear when you consider that money in my pocket today is worth a hell of a lot more than those 30 years from now...
This post was edited on 7/11 at 12:53 pm