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re: Borrowing from your 401K
Posted on 7/10/13 at 11:36 am to LessofLes
Posted on 7/10/13 at 11:36 am to LessofLes
It sounds like you're going into it with your eyes open. My plan doesn't prevent contributions when a loan is outstanding, but it does have restrictions on early payments while still employed. Pretty cool that yours doesn't.
Depending on the purpose, I'd consider doing it myself. I've come to believe that personal finances are never a black and white issue and there are no universally good and bad actions.
You're right about the tax implications (you're paying it back with after tax dollars regardless of who you borrow from) but just wanted to point that out. Some people don't want to forfeit the tax advantages of their retirement accounts.
Good luck!
Depending on the purpose, I'd consider doing it myself. I've come to believe that personal finances are never a black and white issue and there are no universally good and bad actions.
You're right about the tax implications (you're paying it back with after tax dollars regardless of who you borrow from) but just wanted to point that out. Some people don't want to forfeit the tax advantages of their retirement accounts.
Good luck!
Posted on 7/10/13 at 4:41 pm to ZereauxSum
FWIW my plan treats 401k loans as a simple loan that uses your 401k as collateral. A loan does not reduce my balance or prohibit continued contributions. I simply pay the overall plan back at a very low interest. It provides a great avenue to consolidate higher interest debt or even finance certain items.
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