SYRACUSE, N.Y. (WSYR-TV) - Despite the words from financial advisers, people who have access to loans from their 401k plans, take them.
Studies show it’s a habitual thing.
In other words, once the loan is paid off, 20% of us take another one out.
If the money isn’t in your retirement plan, it’s not making money.
A recent study from Boston College shows that taking loans from 401k plans can deplete wealth by as much as 25% over a 30 year period.
All of this leads to employees who take out loans have to work longer to make up for the money lost in their 401k plan.
If at all possible, try to avoid taking out 401k loans because it’s money that is not earning money. You’re paying back the interest with after tax dollars and you’ll get taxed again when you take it out.
Unless you have an extreme circumstance, financial adviser Rick Reagan says don’t do the 401k loan.
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