Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
This sounds like a very Foolish strategy to me but no one has mentioned this before. So am I missing something here?

As others have noted, borrowing from your tax-deferred plan is a lose-lose for the borrower. When my former firm used to bring in outside consultants to "educate" the employees on the advantages of the firm's retirement plan, they always pointed to this feature as a real bonus. When I would talk to these experts outside of everyone else hearing, they would describe it as a "chump" play. It's included in most plans as an incentive to get people to participate, not because it is a good deal. Unless you are in a true family emergency, and can't borrow money any other way, I would stay away from borrowing from your retirement account. Just an opinion from someone who really doesn't know much about anything.
Print the post  

Announcements

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.
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.