Quoted: borrowing from a 401K is always a bad idea IMHO.
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It depends really...
For starters you're mucking with your retirement money.
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I agree that 401k funds should be a last resort, but there can be some advantages to a loan from your 401k plan.
Secondly, if you dont pay it back you get hit with taxes and penalty on it plus you screwed up your retirement.
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That is not a 401k loan, what you are talking about is a withdrawl.
Thirdly you're paying it back with taxed money which when you take it out it'll be taxed again for a total of 2 times. Save up on the side for a house downpayment
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This may be true in some 401k plans, but not all. I know for a fact, again I am tied into payroll at my company, that the biweekly payments are pre-tax, just like a normal 401k contribution would be, except the contribution goes towards "paying yourself back" -- the paying yourself back actually buys shares of the mutual funds in the plan.
Also, my 401k provider only allows one loan open at a time. It does not allow withdrawls, unless you have an IRS allowed hardship.
Many company 401k's are similar...
Again, if you run ALL the numbers, the 401k loan may be the smartest way to acquire money. Though each scenario is different.
YMMV, worth exactly what you paid for it......