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401 aint for retirement only

Discussion in 'The Lounge' started by POWERMAD, Sep 9, 2006.

  1. POWERMAD

    POWERMAD 1/2 ton status

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    Kick ass deal get it and put into it if ya have it.
    I've been putting in 15% for a bit and recomend it.
    So I am having a new addition next month and was gettin the hairy eye from the ol lady as to how to get all the stuff we need for the last 6 months.
    Month 7 go upstairs and take out a loan from the ol 401.
    Fill up the joint with all the goods that are needed for the new one, get a car, puter, a few other needed items and still have money to put in savings.
    8% interest, all taken out before taxes and my pay is $25 less than normal.
    Hell ya. ;)
     
  2. 8_YOUR_H2

    8_YOUR_H2 1/2 ton status

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    The cool thing about my 401k is that the interest goes back into my plan :wink1:
     
  3. jekbrown

    jekbrown I am CK5 Premium Member GMOTM Winner Author

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    to each their own, I ain't ever taking a loan out against my 401k. Unless it was a matter of life and death, no way in hell. Every 401k book ever written says not to do it, especially for entertainment/fun toys things.

    j
     
  4. POWERMAD

    POWERMAD 1/2 ton status

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    Toys, fun, things.
    Baby, no money on hand to buy..
    Crib
    car seat
    closet full of diapers
    baby cloths
    Lots of other baby stuff
    a rig that will carry a baby
    more baby stuff
    whoo hoo enough to buy a puter
    whoo whoo enough to put some in savings for a rainy day
    hmm no K5 stuff
    Matter of fact I am still typing on the cardboard boxs that the puter came in, of which one is sitting under the puter.
    $279 Dell puter
    Did I mention I put $$ in savings
    All that $$ goes back to me anyway.
     
  5. Fubeca

    Fubeca 1/2 ton status

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    Ditto - there are very few instances where it makes sense to borrow from a 401K. There are a few - its always a good idea to make sure you understand all of the ramifications.
     
  6. POWERMAD

    POWERMAD 1/2 ton status

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    And the ramifications of taking out a very small portion of what I have in there is..?
     
  7. 8_YOUR_H2

    8_YOUR_H2 1/2 ton status

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    None, enjoy.
     
  8. Fubeca

    Fubeca 1/2 ton status

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    http://www.google.com/search?hl=en&q=borrowing+from+401

    Read to your heart's content.

    I'm not saying your decision was bad - I'm just saying everyone should have as much information as possible when making decisions that effect their retirement.
     
  9. newyorkin

    newyorkin 1 ton status

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    You must be doing good! I can barely cut it putting 8% into mine...
     
  10. jekbrown

    jekbrown I am CK5 Premium Member GMOTM Winner Author

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    its easy to calculate exactly what the ramifications are...

    http://www.fincalc.com/QUA_10.asp?id=14023

    If at all possible, 401k/IRA and emergency savings ca$h should be two seperate things. Right now I have a 401k and Roth IRA for retirement... plus a pension (doubt they will be around by the time I retire) and social security (definitely won't be!).

    Emergency $ is a seperate thing. I keep my emergency funds in a free online money market account withy HSBC. This account pays me 5.05% APY, is 100% free to use, I can get the $ at any time with no penalties and the account is electronically linked to my regular banking checking account. This is very handy. If for some reason I needed, say, $2000 tomorow, I could get it. If I don't need it, it keeps charging along making over 5% all the while. That rate will never score me a ton of cash in interest, but it is enough to stave off inflation costs and if I withdraw $ from that account, I don't lose retirement money. That's a loss I'm not willing to accept.

    If you are what they call a "well compensated employee" it probably won't matter... because you're rich and will be able to retire comfortably no matter what you do with 401k loans. For everyone else, its not a good idea and not good advice. Ask rdn2blazer what he thinks of his decision to take out a loan against his 401k if you want an inexpensive (for you, not him!) lesson about the subject.

    j
     
  11. boggerless

    boggerless 1 ton status Premium Member

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    i just did the same thing,but mine is to help pay child support.:rolleyes:
     

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