The Vanguard Group said new data showed around 13% of its customers took out a loan on their 401(k) retirement funds in 2023. Elizabeth O'Brien, senior personal finance reporter at Barrons, joins CBS News to discuss the pros and cons of tapping into your 401(k).
Risks of taking out a 401(k) loan The ability to take out a loan helps make a 401(k) plan one of thebest retirement plans, but a loan has some key disadvantages. While you’ll pay yourself back, you’re still removing money from your retirement account that is growing tax-free. And...
Loans and withdrawals from workplace savings plans (such as 401(k)s or 403(b)s) are different ways to take money out of your plan. A loan lets you borrow money from your retirement savings and pay it back to yourself over time, with interest—the loan payments and interest go back in...
Taking Out a 401(k) Loan? Be Ready to Repay if You lose Your Jobdoi:urn:uuid:efe26434752a2310VgnVCM100000d7c1a8c0RCRDThe costs of taking out a 401(k) loan.Gary ForemanFox Business
“It will come out of your paycheck and there’s no wiggle room on the amount.” And if you leave your job — whether due to choice or not — the loan balance becomes due. While you now get until tax time to put the equivalent in a rollover individual retirement plan or a 401(k)...
However, our concern is whether a TSP loan is the correct source of capital, not whether the borrower should be taking out a loan. Under Scenario 1, if there are no other reasonable ways to borrow money (outside of consumer debt, credit cards,TSP hardship withdrawal, and other high-intere...