Financial Question: Should You Take A Loan From Your 401k?

Financial Question: Should You Take A Loan From Your 401k?

Up to sr 41 k last year with kobe.

They had higher provisions, which was really helpful to a lot of people.

The good thing is, is that this may be your most favorable terms to take the loan idea for ok, the interest rate's gonna be like 3.25% 4% something like that could be prime plus one.

And the interest you're paying is basically paying that pain yourself back so the interest is going back to you.

But the bad typically outweighs the good you lose the value of the dollars that you contribute in two ways.

First its after tax dollars, no contribution for the money that goes to pay off alone.

Plus, the interest you're paying back to yourself is probably you know, over the long term, gonna be lower than actual market returns.

So i think it's kind of like a tagine and anger to your future.

It's never really a good idea, especially for a long term loan.

And if you leave or get terminated, something happens to your employment.

You'll incur taxes alone will come, do you'll, maybe get in with that's it.

Different topic.

There's different ways to take money out for things like happy medical expenses for assigned home purchases and so forth.

But here's what it's for.

Is a provision for people that are in dire straits.

That really have no other options.

That's really why it's instituted in the first place.

Here's what it is.

30 years old to take a loan out here for one k to buy the ft 50 plan on the latest edition and pay $1000 a month in your truck note, so said differently.

It's a tool to help you stay actually seems secure, not to look rich is, i guess the best way to put it, which is probably what we see more off than not s.

O at times.

People will also treat this at like a margin loan.

Impede that quickly and the race could be more favorable than any other options people that are typically doing this or that that have these means or that are more savvy about it.

They have other means that they can tap into so.

It's really just for those people in dire straits, so just because you can do it in a smart way.

Doesn't mean that you should you really don't wanna cross the threshold.

Of your 41 k into some sort of savings account or loan account.

Student loan rate was like 6% and it was this huge psychological burden and you could tap into the 41 k like maybe that's an exception.

Right?

But maybe that could also maybe there's also provisions for you to actually just withdraw the fines rather than take alone, so i just think they that's when it's.

Really time to talk to professional like, run those