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...am I missing something here?

The other problem for many people would be that, if they have borrowed money -- say, $20,000 -- from their 401(k), they may not have that same amount sitting in a savings account or other liquid asset. If an opportunity for a new job comes up -- or if they are laid off -- they may have difficulty coming up with the $20,000 to pay off the loan.

If you have the money, or if you're the owner of the company that has set up the 401(k) and also an employee, or otherwise extremely secure in your present employment situation, you don't have to worry about the tax and penalty implications of being unable to pay off the loan. But that won't work for everyone.

Just my $0.02,
Phooley in Phoenix
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