Action Tip: Don’t take out a 401k loan. It’s not smart. It’s not wise.
You put yourself in an unbelievable bind when you do.
You unplug money for the short-term that’s supposed to be working for the very long-term. You substitute paying compounding interest for earning compounding interest. What you need is an emergency fund to access right away, not a retirement fund with no emergency fund to tap.
Not only that, you’re trapped in the job because you have to pay it within 60 days if/when you leave. Then, if you can’t pay, you get hit with taxes and a 10% penalty. Watch your productivity at work go right down when you’re weighed down and stressed out by a 401k loan.
Don’t believe your broke coworkers who brag how easy, smart and helpful it is to do. It’s not.