I'm off to the local dealership to get me some!
since I'll be on a Harley again, do I need to......
Road Warrior
Joined: Jun 2008
Posts: 1,759
Likes: 1
From: Breaux Bridge, LA
Might not be a bad idea. From what I heard on the news yesterday, if the gov doesn't get their **** together and figure out this budget mess, the economy is going to take another dump, so everyone's 401k's might be taking another serious hit. Of course, I don't know jack about the economy or the like, so I'm just repeating what I heard on the news.
Elite HDF Member
Joined: Oct 2006
Posts: 4,128
Likes: 27
From: florida swamp
Might not be a bad idea. From what I heard on the news yesterday, if the gov doesn't get their **** together and figure out this budget mess, the economy is going to take another dump, so everyone's 401k's might be taking another serious hit. Of course, I don't know jack about the economy or the like, so I'm just repeating what I heard on the news.
Road Master
Joined: Aug 2009
Posts: 868
Likes: 4
From: Warwick, RI
If one borrows against their 401K and the 401K tanks ... they still owe that money. not to mention you are taxed heavily on borrowing against your 401K unless you are a first time homebuyer. Also, depending on the company, you are charged fees. When you borrow against your 401K you are basically borrowing from yourself. From your retirement plan. You are borrowing dollars that you saved pre-tax. It has a value of "x" at time of borrowing. It still has a value of "x" regardless of how the economy goes. If you borrowed 100 bucks from your friend, and the economy tanks, do you no longer owe said friend 100 bucks?
Elite HDF Member
Joined: Feb 2008
Posts: 3,817
Likes: 2
From: Novi MI
You're not taxed if you borrow from it but you have to repay with interest. It depends on what the interest rate is if it's a worthwhile idea. It probably isn't. Kajunkruzer is saying if the market tanks, you lose less 'cause you withdrew the funds. But, if the market goes up, the loan is essentially costing you more.
Last edited by barjbar; Jul 13, 2011 at 02:00 PM.
Tourer
Joined: Jul 2010
Posts: 458
Likes: 0
From: Havertown, PA
The only reason it would cost more borrowing from a 401k if the market goes up is because he wouldn't have the money he borrowed in the 401k so he would lose out on the missing shares he sold.
The upsides to borrow from a 401k if he can pay back the loan in a year he gets all the interest he paid back.
The upsides to borrow from a 401k if he can pay back the loan in a year he gets all the interest he paid back.
Outstanding HDF Member
Joined: Dec 2009
Posts: 2,414
Likes: 3
From: Corporate States of America
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Last edited by Zig Zag 2010; Nov 2, 2011 at 02:16 PM.
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