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by Anonymous on October 27th, 2006

Anonymous

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I'm in my 40's , Can I take out my 401k for a small bussines ? Can this be taken as a loan or I will still need to make a complete withdraw , is any way I can avoid paying so much penalties ?

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Answers. 2 helpful answers below.

  • by writemyselfaletter on November 1st, 2009

    writemyselfaletter

    You cannot use your 401k as collateral and you cannot withdraw it as long as you are employed by the firm. You may be able to take a loan if your plan document allows it for this purpose, you will pay market interest rate and your employer will withhold the repayment amount from each check.

    This, however, is an extremely unwise thing to do. You are using secure retirement savings and accumulation and transferring to an extremely high risk investment that may or may not pan out. And if it does not pan out, you will still be paying the loan until paid in full.

    If you can afford all this, use the funds to increase your 401k contribution to 15% of gross income annually.

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  • by Anonymous on October 27th, 2006

    Anonymous

    If you touch your 401k, it is going to cost you. big time. wonder if there is a loan available, that would use your 401k as collateral? read the small print in your 401k program. hope this works for u.

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