If I borrow money from my 401K, and the company gets bought out?
Your current employer doesn't own the 401K, it sends your mone (and it's own match) every month to the benefits administrator. You can't make payroll contributions while you have an outstanding loan, so there are no employee matches either. Your loan will stay with the 401K plan and you have to follow whatever is stated in the plan documents. Get a copy of the plan documents and read them carefully about paying back your loan.
How many times can you borrow on your 401k?
As above, each company has its own set of rules. In general, most plans have a rule about how many loans can be open at the same time (1 - 2) without consolidation ("refinanced") and how many times a loan can be consolidated (1-2) and/or within what period of time (1-3 years). If you have paid off all the previous loan(s), the simple answer to your question is probably that you can borrow again.
Should I borrow from my 401k to pay for a new car?
Yes and no. I borrowed from my 401k as a loan to myself to buy a car.Yes because: All of the 401k funds I could choose from were barely earning anything. So by using my 401k I could earn more interest on the principal by paying the interest to myself. I checked with my accountant and he agreed it was a no-brained to write myself the loan. If your 401k is earning decent interest then maybe this isn't a good way to go.No because: When I got laid off, and this may very well be the case if you change jobs, I had to pay off 100% of the remainder of the loan which was a big chunk of money at a bad time.So it really depends upon what your 401k is earning, how much would it cost to finance elsewhere, job situation.
How do i find out it i have a 401k plane? can i get money from it?
Look on your pay check stub. Are you contributing to a savings plan. If you are it is more than likely a 401K plan. Yes, you can borrow from your 401K (you can't just take money out, you have to pay it back) but it's a lousy idea to borrow money from your savings plan for a car. It's cost you big fees and penalties and it'll take you longer to recover the money than it would be to just go get a loan.
Should I borrow 10K from my 401K to put down on a house?
Borrowing against your 401K means you are borrowing from yourself. Unlike borrowing from a bank, the interest you pay, you pay to yourself. The amount you borrowed is no longer invested so rather than getting investment gains, your “gain” is the interest you pay back.It really depends on your financial situation and your current status with your employer. You have five years to pay back a 401k loan, ten if the loan was used to buy a home. The exception to these rules is if you leave or are fired from the job. In some cases, you will be required to repay the loan within 60 days.Be warned, a 401K loan can have bad consequences. If you can’t pay the loan back, it becomes a penalty withdraw so this is not a decision to make lightly or a loan to take out to pay for something frivolous like a television or vacation.But under the right conditions, it can be a great decision that can save you money in the long run.Look into Listen Money Matters — a personal finance blog and podcast. They actually answer this question!
What happens to my investments if I borrow money from my 401(k) as a loan? Do they decrease the same amount as the loan?
Dear Josiah,When you borrow money from your 401-k, (bad idea) you are using your retirement funds as collateral. That is why you can seldom withdraw in a loan more than 40% to 50% of the value of the account.The value of the loan is subtracted from the value of the available funds. In essence, if you left the employer with a loan on your 401-k and requested the money they would subtract 1. any funds you are not entitled to due to a vesting schedule 2. the value of your loan and 3. any interest due on that note.Now if you are considering borrowing from your 401-k please don’t. In the first place, you will pay taxes twice on anything your borrow plus the interest it costs you while you borrow it. Consider this:You take a loan out on your 401-k.You repay the loan through your paycheck with after-tax money. Money on which you have paid taxes goes back into your 401-k to replace the money you took out.Your pay back the loan and your retirement plan now has money in it upon which you have already paid taxes.Now you go to withdraw your money from the 401-k, and it is all taxable. Some of it is being taxed twice.I have yet to meet anyone who has the desire to pay the government 50% of their earnings, yet that is approximately what you do when you borrow from your 401-k.I wish you well.AW Stites retired CFPTeaching Baby-Boomers how to have incredible retirement years and how to work online as Freelancers anywhere in the world where there is an internet.
Is it worth it to borrow from your 401k to buy land?
Even tho there is some truth to the old chestnut “Buy land. They’re not making any more of it!”…I’d answer your query NOT as a real-estate question; but as a 4011K question, And in that vein, the conventional wisdom (with which I agree) is that you don’t take money from your retirement account - except as a last resort.401K’s have all sorts of tax advantages and limitations (rules) that augur against such borrowing. There are tax penalties for withdrawing before age 59.5 - and tho you can “borrow” from a 401K to buy your home (down-payment), no self-respecting tax guy or financial advisor would let you do it.It defeats the purpose of the 401 (or IRA, for that matter) - which is to garner the benefits of tax free compounding.But I’ll tell you who would tell you to borrow - the bank that would handle the Real Estate transaction. Its been my experience that they’ll say: “You can borrow from your 401K for a down payment… and you pay yourself back”Which is true; but while the $$ is out of the 401K, its not working for you.Finally, about 20 years ago I did exactly what I’m cautioning you against: I borrowed from my 401K to provide a down-pmt so my sibling and I could buy a multi-family home. Looking back (and knowing what I know now) I shudder to think how much larger my nest egg would be if I hadn’t done it. I probably won’t be reduced to eating cat food; but I might go out to eat more often!
How soon can I borrow against my 401 (k) after I repay my current loan?
One note. When you re-pay a 401K you are paying back with AFTER tax money. Then, when you retire, you will have to pay taxes again on that money. If you need a car, you need a car. Ask your HR manager for the loan. They will allow you to borrow right again in a hardship situation. Note: If you have this much trouble saving, consider stopping your 401K contributions and start building up your 6 months worth of emergency living expenses. No one, absolutely no one should live without this. /