OgieJFK
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Depends on the situation. Just be prepared to be hit hard at next years tax time if you borrow from the 401k.
Are you ready?
- Thread starter Bob Owens
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Depends on the situation. Just be prepared to be hit hard at next years tax time if you borrow from the 401k.
Frank Szabo
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Ogie:
Borrowing is set up as a loan you pay back through the group administering the 401 - you're thinking of an outright withdrawl and you're correct - prepare for a hosing from the Infernal Revenue Disservice if you do that as it's taxed at 10% penalty in addition to the addition to your income. The bill gets rather large in a hurry.
eolesen
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Borrowing from a 401K isn't necessarily a bad idea.
What's inherently bad is proposing to borrow from any source when the likelihood of being able to make the repayment schedule is in question.
Nobody wants to face going into default on their mortgage or car, or not have money for food & heat, but taking out a 401K loan when you lose your paycheck should be seen as a matter of last resort, not a path of convenience or least resistance...
Everyone, regardless of who they are, should have at least enough in liquid savings to cover two months of expenses, if not more. How you get to that point is up to you.
What's inherently bad is proposing to borrow from any source when the likelihood of being able to make the repayment schedule is in question.
Nobody wants to face going into default on their mortgage or car, or not have money for food & heat, but taking out a 401K loan when you lose your paycheck should be seen as a matter of last resort, not a path of convenience or least resistance...
Everyone, regardless of who they are, should have at least enough in liquid savings to cover two months of expenses, if not more. How you get to that point is up to you.
