Home › Forums › Financial Markets/Economics › Borrowing Against a 401k
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BGinRB.
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February 19, 2009 at 2:35 PM #350469February 19, 2009 at 2:39 PM #349899
vizcaya
ParticipantYes there are early witdrawl penalty. But no penalty for a loan. Its similiar to a home equity loan, except it is not tax deductable.
February 19, 2009 at 2:39 PM #350216ParticipantYes there are early witdrawl penalty. But no penalty for a loan. Its similiar to a home equity loan, except it is not tax deductable.
February 19, 2009 at 2:39 PM #350343ParticipantYes there are early witdrawl penalty. But no penalty for a loan. Its similiar to a home equity loan, except it is not tax deductable.
February 19, 2009 at 2:39 PM #350376ParticipantYes there are early witdrawl penalty. But no penalty for a loan. Its similiar to a home equity loan, except it is not tax deductable.
February 19, 2009 at 2:39 PM #350479ParticipantYes there are early witdrawl penalty. But no penalty for a loan. Its similiar to a home equity loan, except it is not tax deductable.
February 19, 2009 at 2:52 PM #349909AK
ParticipantConsider switching some of your 401K to a high-yield bond fund instead, if that’s available through your plan. Risk is high but at long last, yield is reflecting the level of risk.
February 19, 2009 at 2:52 PM #350226ParticipantConsider switching some of your 401K to a high-yield bond fund instead, if that’s available through your plan. Risk is high but at long last, yield is reflecting the level of risk.
February 19, 2009 at 2:52 PM #350353ParticipantConsider switching some of your 401K to a high-yield bond fund instead, if that’s available through your plan. Risk is high but at long last, yield is reflecting the level of risk.
February 19, 2009 at 2:52 PM #350386ParticipantConsider switching some of your 401K to a high-yield bond fund instead, if that’s available through your plan. Risk is high but at long last, yield is reflecting the level of risk.
February 19, 2009 at 2:52 PM #350489ParticipantConsider switching some of your 401K to a high-yield bond fund instead, if that’s available through your plan. Risk is high but at long last, yield is reflecting the level of risk.
February 21, 2009 at 11:19 PM #351822HLS
ParticipantVIZ,
You understand the concept well…
a 401K loan is also a possible way to avoid mortgage insurance, with the savings representing a guaranteed return.1) Find out if you can repay the loan at any time in a lump sum if you want to
2) Your CD interest will be taxable, possibly making your net return not much more than your 401K sheltered return. One way to avoid this is with a tax sheltered acct if possible.
3) The major downside to a 401K loan is that if you lose or leave the job, you may have to repay it in full within 30/60 days otherwise it is taxed as income plus a penalty (10%+)
Check with YOUR plan administrator for their rules and ask lots of questions before taking the loan.
February 21, 2009 at 11:19 PM #352136ParticipantVIZ,
You understand the concept well…
a 401K loan is also a possible way to avoid mortgage insurance, with the savings representing a guaranteed return.1) Find out if you can repay the loan at any time in a lump sum if you want to
2) Your CD interest will be taxable, possibly making your net return not much more than your 401K sheltered return. One way to avoid this is with a tax sheltered acct if possible.
3) The major downside to a 401K loan is that if you lose or leave the job, you may have to repay it in full within 30/60 days otherwise it is taxed as income plus a penalty (10%+)
Check with YOUR plan administrator for their rules and ask lots of questions before taking the loan.
February 21, 2009 at 11:19 PM #352265ParticipantVIZ,
You understand the concept well…
a 401K loan is also a possible way to avoid mortgage insurance, with the savings representing a guaranteed return.1) Find out if you can repay the loan at any time in a lump sum if you want to
2) Your CD interest will be taxable, possibly making your net return not much more than your 401K sheltered return. One way to avoid this is with a tax sheltered acct if possible.
3) The major downside to a 401K loan is that if you lose or leave the job, you may have to repay it in full within 30/60 days otherwise it is taxed as income plus a penalty (10%+)
Check with YOUR plan administrator for their rules and ask lots of questions before taking the loan.
February 21, 2009 at 11:19 PM #352298ParticipantVIZ,
You understand the concept well…
a 401K loan is also a possible way to avoid mortgage insurance, with the savings representing a guaranteed return.1) Find out if you can repay the loan at any time in a lump sum if you want to
2) Your CD interest will be taxable, possibly making your net return not much more than your 401K sheltered return. One way to avoid this is with a tax sheltered acct if possible.
3) The major downside to a 401K loan is that if you lose or leave the job, you may have to repay it in full within 30/60 days otherwise it is taxed as income plus a penalty (10%+)
Check with YOUR plan administrator for their rules and ask lots of questions before taking the loan.
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