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Financial Planning / Foolish 401(k)s


Subject:  Re: Contemplating a move... Date:  7/2/2012  11:20 AM
Author:  mjolah Number:  24903 of 26118

The answer is, it depends on the terms of your prospective employer's plan. Each plan can set certain parameters around things like loans (subject to restrictions contain in the tax code). Ask. Many plan sponsors allow loans from rollover funds. Some don't. From my perspective, if the plan allows for loans (and not all do), then I see no real disadvantage to the plan sponsor in allowing them from the rollover funds within the plan. Keep in mind that there are restrictions on the amount you may borrow (the lesser of 50% of your balance, or $50,000) and there are time restrictions for pay back (5 years, unless it's for the purchase of principal residence, and then it may be longer - but there may be other restrictions, etc.).
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