Comments on: While Never Prudent To Borrow Against Your 401k – Did I Get Lucky With An Exception?

By: digdownd

digdownd — Wed, 10 Feb 2010 08:40:45 +0000

IF you HAD to, you HAD to…try not to get in a habit… and make sure you work at getting back to where you were. The 15% drop is nothing in the long life of a 401, you’ll go up and down , up and down, just keep your eye on the long-term prize!!
Some 401 plans are strange in that ” borrowing” sense…I had a friend who borrowed from her plan ( not ” withdrew”) and as she paid back with interest…everything INCLUDING the interest went to HER ACCOUNT. Fantastic! I hope your deal works out as well.

By: Sec Educashun

Sec Educashun — Wed, 10 Feb 2010 03:34:39 +0000

Sure, unless you borrowed prior to a dividend/capital gain payout. But, yes…you were able to get your funds out of a losing situation and buying back in a winning situation.

By: Anonymous

Anonymous — Wed, 10 Feb 2010 02:57:43 +0000

Yeah, you got lucky. I took out a small loan against my 401K about 7 years ago and also got lucky. Actually I don’t think it’s as bad as they make it out to be anyway. You are paying interest back to yourself instead of to someone else. I would never take out a really big loan on my 401k though.

By: heeltap

heeltap — Wed, 10 Feb 2010 01:01:16 +0000

If you can buy back at a lower prices, pay off the loan for the full benefit of “selling short.” ! assume you are in it for the long term. Opportunities like you are getting will help cover your losses on the rest of the portfolio and when the market comes back, and it will, you will have made real money. Don’t listen to the common line put out by your 401k administrator and your company. They love the sheep who think you only make money buying in the hope of increases in prices.
Good luck