Each Wednesday 401kBasics posts a new article in a weekly series called “Keep the Course”. This series is designed to give the average consumer information on how to keep their 401k plan on track! Your feedback or suggestions on future articles is welcome.
Over the next few weeks, 401kBasics will feature some of the most commonly asked questions.
“Someone I know took a loan from their 401k, but when I tried to take on, I was told I wasn’t allowed, why is this?”
Some plans don’t allow loans. Plan sponsors (your employer) can decide what provisions they want to allow, and which ones they don’t. Sometimes plan sponsors don’t adopt a loan provision, in an attempt to preserve the original intentions of a 401(k) plan, which is namely, to save for retirement.
If you’re in desperate need of money, you could look into temporarily reducing your 401(k) contributions, or if the plan allows you can look into taking an in-service or a hardship withdrawal. If none of these options are available, then you’ll just have to accept that your retirement plan is reversed for your retirement!
This site is for entertainment purposes only. 401kBasics and it’s authors are not financial advisors and no information found on this site should be construed as financial advice.