401(k) Loan Do’s and Dont’s – Utilities Employees Credit Union

so you need a loan and you want
the best deal, right? your buddy tells you that he took a loan
against his 401(k) and that it’s awesome because he’s just
paying interest to himself sounds great, right? well, that truth is a bit deceptive before you take a 401(k) loan
consider the good and the bad are these loans easy to get? absolutely are the interest rates low? yes they are are the payments reasonable? usually now they sound really good don’t they? not so fast. it’s really not as rosy as it sounds when you borrow from your 401(k)
the funds you use aren’t growing in the investments you’ve chosen and that can make a big difference when you retire because compound interest is what makes investments grow if you leave your job or get behind in your payments you have to pay the balance off immediately or treat it like a retirement
distribution which is taxable and if you’re under
fifty nine and a half years old then you also pay an additional 10
percent penalty that’s a pretty high price to pay for
a loan these days so the next time you need a loan, small or large call UECU before you start
borrowing from your 401(k) borrowing from your future retirement income is almost never a good idea in a recent
study by Fidelity: taking just two 401(k) loans reduces your retirement savings by
an average of 14 percent and by the fourth loan, you’ve lost 23 percent don’t start down that path and if you have call us so we can help don’t rob your retirement to meet today’s needs call UECU to find another way you’ll be so glad you did

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