ORLANDO, Fla. — If you’re struggling to pay your bills, taking a loan from your 401(k) may be an option, but be careful.
WFTV consumer advisor Clark Howard says when borrowing from your 401(k), you’re also borrowing from your future because that money’s not in the 401(k) to grow.
Clark says in order to make the payments back to the plan, people have to stop making the contributions they’ve been making to their 401(k), meaning they’re going to have a lot less money down the road.
It easy to take out a loan against the plan with most employers.
The interest rate’s not bad, but the long-term effect of it can be bad for your finances, so Clark advises to think twice before going this route.
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