Comments on: The 401k Loan: How to Borrow Money From Your Retirement Plan and What You Need to Know

By: JohanvanderMerwe

JohanvanderMerwe — Wed, 02 May 2012 23:07:59 +0000

Good day. I am an South African working for a joint American/Indonesian company, I have a 401K retirement plan…how will I be affected by tax, do I pay american tax, Indonesian tax when it is paid out. And if I take a loan and lose my job before it is paid in full, how are they going to get there money …tax/outstanding balance etc from me if I am not an american citizen

Kind Regards

By: Orbhidsjoan

Orbhidsjoan — Tue, 17 Apr 2012 14:23:14 +0000

I live in Canada so do we have this option to borrow from our retirement fund and if so how do we go about it.b????I am on disability now and have exhausted all monies given from ei and now just trying to line on work insurance. There is too many things to pay for.please advise wher I can get a loan .

Thank you for your help

By: marybdings

marybdings — Mon, 26 Mar 2012 15:04:49 +0000

By: anymtr

anymtr — Sat, 03 Mar 2012 23:24:37 +0000

@Jeremy Vohwinkle Thank you. I think I will think about this a little bit. I might need to lower my monthly contribution as I do not want to take home less than I already am if I decide to take a loan against my 401K

By: Jeremy Vohwinkle

Jeremy Vohwinkle — Sat, 03 Mar 2012 19:56:19 +0000

@anymtr Loan payments are in addition to any regular contributions. So if you kept your 401k contribution where it is you’d have a total $550 deduction from your paycheck. Hope that clears it up for you.

By: anymtr

anymtr — Sat, 03 Mar 2012 19:24:34 +0000

I have 8% deducted from my paycheck every month to put into my 401K. I want to pay off my credit card which has gotten out of hand. I can take a loan from my 401K to pay it off. Does the 8% I contribute from my paycheck count as the monthly payoff to the 401K loan or is that in addition to the 8% contribution. For example, My monthly contribution to my 401K is $250, the loan payback amount per month is $200. Does the $200 come out of the $250 or is there going to be a total of $550 deduction from my paycheck? I hope that made sense. Love the article by the way.

By: freetouse

freetouse — Tue, 14 Feb 2012 01:35:25 +0000

“You are also repaying part of the loan with money that has already been taxed.” is not a valid disadvantage. Because the money you are getting from the loan, you can use it as if it were after-tax anyway, so there is no difference that you are paying back after-tax money.

By: Jeremy Vohwinkle

Jeremy Vohwinkle — Tue, 31 Jan 2012 16:52:17 +0000

@meloweee Unfortunately, this is one of the big drawbacks of 401k loans. These loans are tied to that specific plan, and rarely do new providers assume existing loans. The same is true if you lose your job or leave a company before the loan is paid off. You generally only have a specific amount of time to repay the loan in full or else the balance gets treated as a premature distribution and would be subject to taxes and/or penalty.

By: meloweee

meloweee — Mon, 30 Jan 2012 23:34:29 +0000

My company was sold Jan of 2011. The new owner did not take over the 401 k and so we were told to move the money from the current provider. I rolled some money into a ira at my bank. I had a loan and the provider said it must be paid and they would only send the check minus the loan balance they were paying off the loan I wanted to continue my payments and they said I could not. Now I find out the pay off of the loan amount was taxable I cant believe this! Can you explain or is this a mistake. Please helf

By: Boyd

Boyd — Wed, 19 Oct 2011 04:05:57 +0000

I am 78 years old. I have made three withdrawals (loans)totaling $25,000 in the last 60 days plus a MWD prior to that.
I would like to replace the $25,000 but was told I could only replace a single withdrawal if it were in the last 60 days.
Some folks tell me I can replace all three and others have told me I could only replace one.
What is correct?