Are 401(K) Loans A Good Solution?

Are 401(K) Loans A Good Solution?

Most people need to borrow money at some point, but is borrowing from a 401(k) plan the best solution? You can borrow up to 50% of your account value up to a maximum of $50,000. Further, borrowing from a 401k plan is unique in that you’re borrowing from yourself instead of from a third party. The interest and principal that you pay goes back into your plan. However, you could forgo the ability to make further contributions and receive a matching contribution from your employer, and forfeit some of the tax-deferral advantages that make 401(k)s so beneficial.

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