Should You Borrow From Your 401(k)?
Will Borrowing Crack Your Nest Egg?
Many 401(k) plans allow you to borrow from your account balance, letting you repay the loan through automatic, after-tax payroll deductions. Borrowing from your 401(k) plan has certain advantages, but it also poses drawbacks--loan balances must be paid off in five years and if you leave your job, you may be required to pay back the full balance within a short-time frame or pay penalties and taxes. Most important, borrowing from your 401(k) can significantly reduce your retirement savings nest egg.
To find out how much borrowing might cost you if you reduce your contributions and settle for potentially lower returns, answer the following questions and then select Submit.