cryptokababs Posted March 21, 2019 Report Share Posted March 21, 2019 401K account nunchi personal loan teesukundamani plan chestunna....idi good idea na bad aa? mee throughts cheppandi Quote Link to comment Share on other sites More sharing options...
rocky420 Posted March 21, 2019 Report Share Posted March 21, 2019 How much are you planning to take? You will get double taxed for that amount. Quote Link to comment Share on other sites More sharing options...
r2d2 Posted March 21, 2019 Report Share Posted March 21, 2019 Advantages: • The loans incur no income tax or penalties for early withdrawal unless you default. • There is no credit check or long application form, opening options if your credit scores are bad. • Most loans become available quickly and you can borrow for almost any reason. • Most 401(k) loans come with interest rates cheaper than credit cards charge. • You pay interest on the loan to yourself, not to a bank or other lender. Disadvantages: • To borrow money, you remove it from investment in the market, forfeiting potential gains.Calculate your potential losses carefully. • Borrowed funds are taxed twice. You earn and pay taxes on wages and use those after-tax funds to repay the loan. During retirement, you again pay taxes, this time on withdrawn funds. If you're in the 25% federal tax bracket, twice the tax is extremely expensive. • You ultimately contribute less to your retirement plan because a portion of new contributions goes toward paying off the loan. • Not all 401(k)s allow employees to borrow from the accounts. Check with your human resources department before you even begin to consider a loan. • If you cease working with your current employer, your entire loan usually comes due within 60 days – making your job security for the next five years a big consideration. The loan defaults if you can't repay; you pay tax on the outstanding amount and incur a 10% early withdrawal penalty until you reach age 59½. Consider a 401(k) loan only if you exhaust all other financial resources, including home-equity loans. https://www.usatoday.com/story/money/personalfinance/2014/05/04/adviceiq-401k-loans-pros-and-cons/8632999/ Quote Link to comment Share on other sites More sharing options...
MiryalgudaMaruthiRao Posted March 21, 2019 Report Share Posted March 21, 2019 I took 10k recently from 401k @ 6.5% Quote Link to comment Share on other sites More sharing options...
cryptokababs Posted March 21, 2019 Author Report Share Posted March 21, 2019 2 minutes ago, r2d2 said: Advantages: • The loans incur no income tax or penalties for early withdrawal unless you default. • There is no credit check or long application form, opening options if your credit scores are bad. • Most loans become available quickly and you can borrow for almost any reason. • Most 401(k) loans come with interest rates cheaper than credit cards charge. • You pay interest on the loan to yourself, not to a bank or other lender. Disadvantages: • To borrow money, you remove it from investment in the market, forfeiting potential gains.Calculate your potential losses carefully. • Borrowed funds are taxed twice. You earn and pay taxes on wages and use those after-tax funds to repay the loan. During retirement, you again pay taxes, this time on withdrawn funds. If you're in the 25% federal tax bracket, twice the tax is extremely expensive. • You ultimately contribute less to your retirement plan because a portion of new contributions goes toward paying off the loan. • Not all 401(k)s allow employees to borrow from the accounts. Check with your human resources department before you even begin to consider a loan. • If you cease working with your current employer, your entire loan usually comes due within 60 days – making your job security for the next five years a big consideration. The loan defaults if you can't repay; you pay tax on the outstanding amount and incur a 10% early withdrawal penalty until you reach age 59½. Consider a 401(k) loan only if you exhaust all other financial resources, including home-equity loans. https://www.usatoday.com/story/money/personalfinance/2014/05/04/adviceiq-401k-loans-pros-and-cons/8632999/ Thanks Bro..ee point ardamavaledu...ippudu mana loan teesukunna kuda...aa loan ki tax pay cheyala? Quote Link to comment Share on other sites More sharing options...
rocky420 Posted March 21, 2019 Report Share Posted March 21, 2019 Just now, MiryalgudaMaruthiRao said: I took 10k recently from 401k @ 6.5% You are getting double taxed for 10k because your monthly repayments are taxed and when you withdraw the 401k during the retirement you will be taxed again. Never take a loan from 401k Quote Link to comment Share on other sites More sharing options...
r2d2 Posted March 21, 2019 Report Share Posted March 21, 2019 3 minutes ago, cryptokababs said: Thanks Bro..ee point ardamavaledu...ippudu mana loan teesukunna kuda...aa loan ki tax pay cheyala? Yes.. I wouldn't touch my 401k with a barge pole.. Quote Link to comment Share on other sites More sharing options...
sameer1384 Posted March 21, 2019 Report Share Posted March 21, 2019 5 minutes ago, rocky420 said: You are getting double taxed for 10k because your monthly repayments are taxed and when you withdraw the 401k during the retirement you will be taxed again. Never take a loan from 401k Every year I took the loan money from 401k but repay in 12 months. i feel its really taking loan from our amount and repaying immediately . I rather enjoy everyday of myself taking money from my amount instead of going through credit check and paying high interest rates. lots of peace of mind. more over its quick and easy . Its a myth taking a loan from 401k is bad. Money you owe to 401k dont grow during your loan period. that made lots of sense. Avva kavali Buvva kavali ante kudaradhu kada. Quote Link to comment Share on other sites More sharing options...
Mitron Posted March 21, 2019 Report Share Posted March 21, 2019 15 minutes ago, MiryalgudaMaruthiRao said: I took 10k recently from 401k @ 6.5% 13 minutes ago, rocky420 said: You are getting double taxed for 10k because your monthly repayments are taxed and when you withdraw the 401k during the retirement you will be taxed again. Never take a loan from 401k k thx Quote Link to comment Share on other sites More sharing options...
Amy99 Posted March 21, 2019 Report Share Posted March 21, 2019 4 minutes ago, Mitron said: k thx you are welcome. Quote Link to comment Share on other sites More sharing options...
kathi Posted March 21, 2019 Report Share Posted March 21, 2019 18 minutes ago, rocky420 said: You are getting double taxed for 10k because your monthly repayments are taxed and when you withdraw the 401k during the retirement you will be taxed again. Never take a loan from 401k This is absolutely false. No matter what you pay taxes while withdrawing money after retirement. Other option is to take a loan from bank which has higher interest rate and also you pay after tax money to bank too. you don't pay pre tax money to personal loan. So, when you have a chance always take loan from 401k instead of other loans provided you have job security as loan will be due when you leave the company. Biggest advantage is you pay interest to your account. Quote Link to comment Share on other sites More sharing options...
cryptokababs Posted March 21, 2019 Author Report Share Posted March 21, 2019 18 minutes ago, rocky420 said: You are getting double taxed for 10k because your monthly repayments are taxed and when you withdraw the 401k during the retirement you will be taxed again. Never take a loan from 401k ee point ardamavaledu bhayya...konchem vivaramga cheppochu kada Quote Link to comment Share on other sites More sharing options...
user789 Posted March 21, 2019 Report Share Posted March 21, 2019 Is $10 k max limit for loan from 4O1 K? Quote Link to comment Share on other sites More sharing options...
cryptokababs Posted March 21, 2019 Author Report Share Posted March 21, 2019 1 minute ago, user789 said: Is $10 k max limit for loan from 4O1 K? It's not like that, loan amount is based on how invested amount towards 401K Quote Link to comment Share on other sites More sharing options...
Spartan Posted March 21, 2019 Report Share Posted March 21, 2019 25 minutes ago, cryptokababs said: Thanks Bro..ee point ardamavaledu...ippudu mana loan teesukunna kuda...aa loan ki tax pay cheyala? that loan is considered as income and u have to pay tax on that for this year. malli tax kattina amount nuvvu EMI or loan repay cheyali. again when u withdraw that amount..u will again pay tax. 1 Quote Link to comment Share on other sites More sharing options...
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