No. of Recommendations: 0
One thing that can happen during a recession or economic downturn is that some people take loans out from their 401(k). A 401(k) that had a pre-recession worth $100,000 may go down to a worth of only $50,000 if the 401(k) holder takes a $50,000 loan from it. The 401(k) has now lost 50% of its value.


another thing that can happen in a downturn is the market value can drop

so Mr Market might decrease your 100k to 70k,
and when/if you borrow 50k (selling near a low?) you're left with only 20k
Print the post  

Announcements

The Retire Early Home Page
Discussion on accelerating retirement day.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement