Borrowing Against Your Retirement Account
I actually did this once, borrowed money against my 401k retirement account, but I only did so because I needed a quick $1,000 for a personal emergency, and I knew that when I paid myself back I’d being paying myself interest rather than paying some lending company my hard earned money in interest.
You may want to REALLY think about this before you do it though. Depending on how much you’re thinking of borrowing, and what that borrowing is for, along with the specific guidelines of your 401k, you might be paying early withdrawal fees and penalties, as well as taxes at year end on that money you borrowed since it is no longer in your 401k, and sheltered against federal taxes.
Like I said, it’s something to really consider. Do you really need the money, or can you get it elsewhere for a good rate? Definitely check into your 401k fund’s guidelines for borrowing money, and see if the benefits outweigh the risks before you proceed.
