Need a Loan?
June 1, 2016
Need a loan to buy a car, pay tuition or cover other expenses? It may be easier and cheaper to get a loan from your employer-sponsored retirement plan (such as a 401(k) or profit sharing account) than to borrow from a bank. The interest is often lower and is funneled back to your own account. Limits apply, including that a loan generally can’t exceed the lesser of $50,000 or 1/2 of your nonforfeitable balance. Note: A loan that isn’t timely repaid may be deemed a taxable distribution and may incur a tax penalty. Plan loans aren’t allowed from SEPs or SIMPLE IRAs.