Business, Economics, and Taxes 2: That's Why We Fight to Take the Means Back

[aparch]

Please do not take out 401k loans. The tail risk on them is extremely high. And you don’t really benefit much. “Paying interest to yourself” is dangerous marketing hogwash.

Anyways, if you lose your ability to pay this back, you could be both out of a job AND have this treated as a distribution on your 401k. Plus, you generally lose out on market returns when you take money out, so whatever you’re paying, you’re actually paying significantly more.

If it worked out for you, great. But this is a *very* risky plan.

Wife didn't have much and I had a tiny amount in a rollover that was sitting from a previous job (who did a shit job of even telling us we had a 401k until they closed their broker and rolled us all over, it was a small, small company). So we just paid the early withdrawal penalties.

It worked out for us, and we're both sitting much better financially for our 401ks now after talking with a fiduciary.