Many people believe borrowing from their 401(k) account is a smart idea because the interest rate is generally lower than a commercial loan. While that might be true, it doesn’t help with the ultimate goal of long-term investing.
Here are some of the reasons why borrowing from a 401(k) isn’t the best choice:
Before an investor borrows from their 401(k), they should think it through completely.
Use a different way to finance the loan if possible. Or, maybe they need to reevaluate their lifestyle and why they need the money in the first place.
Borrowing from a retirement account could have significant long term consequences.
Mountain West IRA does not offer clients investment, tax, financial, or legal advice. Individuals who believe they need advice should consult with the appropriate professional(s) licensed in that area.
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