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Posted on 8/18/25 at 2:52 pm to xBirdx
The principal you repay isn't taxed twice. It’s just returning to your account. Yes, the interest is taxed twice, but that’s not unique to 401(k) loans. If you borrowed from a bank, you'd also repay interest with after-tax dollars, and that interest wouldn’t be tax-deductible either.
Posted on 8/18/25 at 3:09 pm to xBirdx
quote:
recouping some of that thru the interest you are paying yourself…correct?
Sort of true. The problem is you’re paying that interest with after-tax dollars. When you go to take it out, you’ll have to pay income tax (at ordinary rates) again on that interest (compounded) that you paid yourself. Kind of sucks.
Posted on 8/18/25 at 3:52 pm to Randall Savauge
That’s where I am. 401k projections look good with modest 5-6% returns../ but struggling for some things k. The present
Posted on 8/18/25 at 4:00 pm to Randall Savauge
Consider saving less, if that’s feasible. If you’re on track with a lot of wiggle room, it’s not the end of the world to “reward” yourself now with a little bit more free cash flow.
Posted on 8/18/25 at 5:14 pm to slackster
quote:yeah, definitely comes down to fixing the cash flow...either spend less or increase what’s in your pocket by saving less or bringing in more income somehow.
Consider saving less, if that’s feasible. If you’re on track with a lot of wiggle room, it’s not the end of the world to “reward” yourself now with a little bit more free cash flow.
401k loan still has to be paid back, so if you have having cash flow issues now, then it will just get worse.
Posted on 8/18/25 at 5:27 pm to xBirdx
401k is one of the most productive things you can do financially.
Buying a car is typically the biggest highly negative transaction a person does.
You're straight robbing one of the best things for one of the worst.
401k loans are for emergencies. Ur kid wanting a car isn't an emergency.
Buying a car is typically the biggest highly negative transaction a person does.
You're straight robbing one of the best things for one of the worst.
401k loans are for emergencies. Ur kid wanting a car isn't an emergency.
Posted on 8/18/25 at 7:01 pm to xBirdx
Take it out next year and buy bitcoin
Posted on 8/18/25 at 7:05 pm to ronricks
Never take out a heloc or 401k loan on a depreciating asset
Posted on 8/18/25 at 8:17 pm to MMauler
quote:
The problem is you’re paying that interest with after-tax dollars
Posted on 8/19/25 at 7:02 am to xBirdx
I wouldn't touch my 401 for something that has a good chance of being gone before the loan is repaid. Use this as an opportunity to teach you kid how to plan for a purchase and let them contribute. They have a year to work and put something back for it. My two cents
Posted on 8/20/25 at 2:45 pm to xBirdx
You are losing out on the gains that lump sum withdrawal would have made plus the 3% you lost.
Posted on 8/20/25 at 9:13 pm to xBirdx
Only time I did it was buying a house. We pulled it out 6 months before we started looking and it was a good move then. That is the ONLY thing I would do it for, and we have stable jobs.
I am getting 0% offers in my email for new cars daily, used 3.99 but I don't know if that is real. I wouldn't touch it for a car.
I am getting 0% offers in my email for new cars daily, used 3.99 but I don't know if that is real. I wouldn't touch it for a car.
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