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This Is Why You NEVER Borrow Against Your 401(k)

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Comment from : @GabrielClark-c4k

This is click bait Her scenario is not what the video title suggests She took out a loan against her 401k, yes, BUT didn't pay it back and changed employers Isn't that different from taking out a loan to pay off CC's and paying back that loan, plus interest, to build back my 401k? This is ridiculous I'm taking out a loan!
Comment from : @thehomer5913

It amazes me that this guy still gives advice when he is so far detached from life of a normal person The way he says you can’t just go get a loan for 14,000 clearly shows that he’s not really any help
Comment from : @0bservationis1

Americans are in credit card debt like never before and sadly do not have the income to pay these debts off For many, their only option is going into 401(k) accounts and taking money out or borrowing against to get out of debt and to taken these financial weights off of their necks Unfortunately, sometimes you got to do what you got to do and trust what was used will be restored We live one day at a time No need for unnecessary stress when you got a half million dollars set aside that you may not live to spend Weigh your options and make the best judgment call for yourself ❤
Comment from : @soundrasimpson7885

How about if your fully invested ?
Comment from : @dupreymartin1

I'm new to stock and crypto I feel like I’ve missed out on good buying opportunities by investing at the wrong times With a $450K yearly income, I'm considering putting my savings into the market Do you think I should learn to invest myself or rely on a financial advisor? I'm getting frustrated trying to find the right coins on my own
Comment from : @MablePauls

I borrowed 20k before covid to buy a house, 401k dropped so bad due to the covid crash that it looked like a 201k, paid it all back within 2 years… saved my 20k that I borrowed from a dip and bought back in at cheaper shares And the house I bought doubled in price Talk about perfect timing 😂
Comment from : @stevenlui3662

How does one still owe X amount once they have incurred penalty and tax? Why would you pay it back? Isn't that now a withdrawal?
Comment from : @dm_grant

I borrowed against my 401k to help avoid PMI on my house Never regretted it brThese advisors don't think
Comment from : @TheGarywolfbarron8

Damn so this is a big deal Glad i only did 1k and still have my job
Comment from : @stevefg3067

You know you fucked up when Dave only has one solution for you
Comment from : @ropefreeze1660

Only a stupid moron would borrow money from 401k 401k loan is biggest scam
Comment from : @JamesJones-f7d

I’ve borrowed from my 401k pays it off and all the interested went back into my 401 Paid back over 5 years it’s not hard or difficult
Comment from : @princehakim_6427

I borrowed 15k against my 401k at 9 I paid off my 30 APR credit cards My credit report shot up The payments and interest, all, goes back into my 401k account No penalties or taxes And its not reported to the credit bureaus Sounds like win win win to me
Comment from : @cheetodonalddump7078

Another option would be for her to request a hardship loan either transition the current loan into a hardship loan or request consideration to avoid paying the penalties and just paying the taxes on it since it’s considered education and tuition expenses, it may qualify
Comment from : @eliseoquincy

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money I started investing with $150k and in the first 2 months, my portfolio was reading $274,800 Crazy right!, I decided to reinvest my profit and get more interesting For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family
Comment from : @lennoxmutterick6434

Most 401K allocations include a low-risk, low-yield portion Suppose the yield on $30K of your 401K is 2, and meanwhile you're about to buy a car for $30K with a 7 interest rate Taking out the 401K loan instead of the car loan, is a guaranteed no-risk net gain of 5 annually (to that low-risk part of your 401K portfolio) When interest rates for purchases were really low, 401K loans made less sense because you could earn more in the investments But when loans for just about everything have rates of 6, 8, 10 or more, the calculus is different But agree with the title of the video if it went on to say if you don't think you can pay it off
Comment from : @desmo8755

What's a shame is that ppl have to result to borrowing from a 401k I had my ac unit go put with a newborn and Iddnt have 5k to hand out at the time so i borrowed from 401k and I'm paying 75$ biweekly for 4 years Better than it going to credit card
Comment from : @Manutd04690

Had to pull 8k to buy a car Got sick of walking
Comment from : @azewo1438

she called in and asked for advice, and is refuting his advice lol never argue with stupid
Comment from : @StanEscobar

Hey everyone, who's here?
Comment from : @ElenaJonesuy2

What a dumb decision If she was smart enough to seek advice from Dave on how best to repay the loan, you have to wonder why she didn't seek advice before borrowing against her 401k in the first place Frustratingly dumb
Comment from : @Tehui1974

I borrow on margin to buy apartment buildings with debt I'm millions in debt :)
Comment from : @andersonandrew112

I don’t understand why taking money from a 401K is bad Isn’t it technically YOUR money saved up?
Comment from : @thelonewolf191

The fact Ramsey says don't do it, probably mean do it 😂
Comment from : @clayphillips9998

I think a loan with a 401k is good if you know what you’re doing like you don’t plan to leave your job anytime soon, I have some debts I need to pay off quick that I don’t mind doing the loan since it’ll just get repaid back into my 401k in a year right out of my paychecks The only thing I have to do is check if my company still contributes to my 401k if part of my contributions is to pay back that loan
Comment from : @Godfather9814

Yep A friend of mine had $17k in 401k loans - said "It's my money - I should be able to borrow from it" He had no idea that this was going to cost him $7000 if they lost/left his job until I told him about it Luckily, he was able to repay that loan over the next 18 months and didn't lose his job
Comment from : @davidcelliott

Such a dic* but i love him lol
Comment from : @jordandiller923

She can keep make the payment 🤷‍♂️
Comment from : @PrinceOfBabylons

Yes, they bulk it up by 30 for penalties and taxes Yeah, it is a bad thing
Comment from : @justimagine2403

401k is bullshhhh
Comment from : @mempho38128

How can they charge her for her own money
Comment from : @mempho38128

A 401k is not a slush fund
Comment from : @countdown2xstacy

401k is a joke you should only be entitled to pay accumulated interest because it's technically your money and contributionsyou should only have to pay match contribution or accumulated interest from that 14000freaking joke
Comment from : @infowave9654

She acts like it’s Dave’s fault
Comment from : @stevenjames14

I've borrowed from my 401k a few times and paid them all back, my question is, as long as you're able to pay tha loan back to 401k, how is that a bad thing?
Comment from : @Jones22_

NEVER cash out of anything to pay for your child's education Let them work if you have not saved already for that specifically!! Nobody has pension anymore You need that money!
Comment from : @BoudoirBoutiqueNC

401k loan to open a business?
Comment from : @robertgadson

What about for a house down payment? I know a few people who have taken money out of a 401k for this reason and heard good things
Comment from : @millennialveganmama4820

Big deal, Your child got an Education You did the right things Pay the penalties, it will all come back to you
Comment from : @CelestialSci

I don't believe that There's no 6000 in fees
Comment from : @CelestialSci

Ouch
Comment from : @chazb9164

Fidelity 401(k) let you pay back the loan even after you have left your job They added that provision just a few years back So it’s not a concern for some people
Comment from : @smallfry7743

Some employer plans allow you to continue your repayments after you leave
Comment from : @michaelvarney

Called that grown lady kiddo, disrespectful
Comment from : @dwade1852

Hi DavebrbMmm/bbrI took a loan from my 401kbrbMmm/bbrFrom my old jobbrbMmm/bbrFor my daughterbrbMmm/bbrTo get her through her senior year of collegebrbMmm/b
Comment from : @richardgalvan4639

This caller should’ve done her research before she job jumped smh
Comment from : @Anthonythegmmp

I don't even know doing into a 401k was even an option I would much rather pick up a side hustle to pay off debt than do that! The tax on that is crazy!
Comment from : @jayj4439

So as long as you stay employed with the company there's no problem with borrowing?
Comment from : @frankies4500

Very interestingThanks for the great content
Comment from : @richardbottslotsandmore5696

Why did not the daughter take out a student loan to get through her senior year in college?!!
Comment from : @punknhead23

Her daughter can find a part time job that offers tuition reimbursement plus income to throw towards the rest I'm so sick and tired of today's societal norm that the parents are 100 responsible for paying their child's tuition while the child sits on their duff with their hands out
Comment from : @sarahm2878

Life asks for long term commitments but is full of short term occurrences
Comment from : @gogoleateeste9630

I would let the income hit my tax return and increase my tax withholding Or borrow to pay the tax OR get on a payment plan with the IRS Cheaper interest
Comment from : @alexisjankowski3281

He is Assuming someone who took out a small loan is in an pretty high tax bracket
Comment from : @DreamwoodRings

Not all company's do this mine you can still pay the 401k back after leaving or getting fired As long as you make the payment I'm thinking of taking one out to pay a house off I can pay the loan back in 7 months max!!!
Comment from : @pierre598

OMG, my other half is a scary We are in our 50's We have never owned a home mostly because he is terrible with moneybrHis credit is shot, credit cards are all in collection, took out a title loan on a vehicle not worth what he owes on the loan, has no savings, constantly complaining his bank account is in the negative, wants to buy a newer truck and a motorcycle and is hellbent on buying a housebrThere is no $$$ for a down payment and he is looking at homes in the high 300 to low 400,000 range His idea is to borrow against his retirement if need be I just am not on board with this thinking especially at our age What do I do?
Comment from : @EC-om2mr

When he says “they” will use money in her 401k to pay the loan off he’s wrong (I don’t know who “they” are) She will be obliged to pay income taxes and a penalty on the remaining loan balance That’s it brWhen you take a 401k loan, you are borrowing from yourself There is no creditor out there demanding payment, no one will seize your existing 401k balance to pay you back your own moneybrbrYour only obligations on a defaulted 401k loan are Federal and state taxes If you cash out your 401k, the 20 mandatory Federal withholding will be calculated using the 401k pre tax balance PLUS the balance remaining on the loan
Comment from : @jimlavelle4538

You can get out of the 10 penalty on the 401k cash out On you tax return pick the reason ( other ) You're in debt You didn't use the money for lavish things Find a tax guy preferably a retired IRS agent to help you If audited bring all your proof of debt and proof of payment to debt
Comment from : @brent9516

thats why some 401k companies only let you borrow half of your total balance so this wont happen if you quit or get fired you'll still have some of your money 🤷🏾‍♂️
Comment from : @clecle6138

My wife and I purchased our house in 07’ with 0 down (bad loan and bad time) 4 years ago we had the same loan as a 80/20 loan through Wells Fargo 80 was at 525 for 30 years and the 20 was at 925 for 15 years with a balloon payment at the end of the term (A 58k loan with a 47k balloon payment at the end of term) A rotten loan that I fought for years My wife and I took out 20k in savings and borrowed 20k out of my 401k to get out from underwater and drained everything We refinanced the two loans into 1 at 3875 for 20 years, saving $500 per month and repaying $250 a month back into my 401k 9 months later, my wife hit a bonus and received a nice tax return with 2 dependents We paid off that loan to save all of the $500 per month This was a risk, but so far 4 years later it’s paying off All debts paid off except the house with 16 years left on mortgage and hopefully paid off within 10? Mistake well learned and wish I had understood finances better back in 07’
Comment from : @Wolf-rc1tf

OUCH!
Comment from : @concretedriv

This depends on the plan Some allow you to make monthly installments to pay this back as opposed to paying all or nothing
Comment from : @luislopez7716

Lady: speaking brDave: mhmmm
Comment from : @ethannaka1822

I borrow from my 401k to buy gold and silver while I still can Works for me Financial reset coming
Comment from : @mysterybuyer3738

I withdrew my 401k to payoff off debts My job was slow and unemployed was not enough Oh well
Comment from : @shiwanmavaneh4618

If it was up to dave,you would be eating peanut butter sammitchs for every meal !
Comment from : @pauliewalnuts7088

Let your kids pay their own way
Comment from : @davidthecardcollector

In most cases a 401-k loan is the best loan you can take In this one case it doesn’t make sense because you started a new job
Comment from : @ScottAlter-nu9gi

I have an inherited 401k from brother Told I must take it out or portion of it Will get taxed no matter what so I might as well take the lump sum AFTER tax
Comment from : @stevejohnson9788

The lady on the other line hung up awhile ago haha
Comment from : @AllPowa287

the only way I'd tap into my 401k is if I lost my job, couldn't find another one in enough time and was about to lose my house I only have $60k in my 401k at the moment but I only owe $20k on the house, so it's not like I'd be wiping out my entire retirement savings
Comment from : @drunclecookie216

I had a coworker ask me a question I suppose he had around maybe 100k in his 401k saved And it sounds like he took out about 60k to pay off his mortgage brbrDoes anyone agree with this??
Comment from : @Santiago-li7yl

All for a worthless education
Comment from : @unpopularopinion149

Sometimes you have to take a loan to wipe out a loan that has the capacity to destroy your financial well-being, in this case the retirement account
Comment from : @Kevin_Roche

55 interest rate 😖
Comment from : @AnnMitt

If this was a Roth 401K, would she have that penalty he mentioned?
Comment from : @sammyalabamy111

I had a 57 year old employee who borrowed $6000 from his 401K to pay for a cruise that he and his wife put on a credit card
Comment from : @ozarked2363

I just borrowed 50k from my TSP (401k) at 165 to pay of my 50k Mortgage My 4 mortgage interest I was paying about $225 month interest 1st before any priceable was paid If I paid mortgage off in 3-4 years pay about 9k in interest With TSP you only pay 1-2 k interest but you pay that interest back to yourself💥👍🏼brSo I figure I save about 10k 😁 The only money I lose is the 50k will not be in stock market making money or could lose money alsobrI don’t have to worry getting fired or lay-off because I work for USPS over 15 years now After 6 year of service no layoff clause in contract One of the safest job around with a pension also on top of my TSPbrSo you think this was a smart move?
Comment from : @Jeff-or6em

I took a 401k loan to buy cash flowing real estate Still makes me money every month to this day brNever do it to buy liabilities, but use it all day to buy assets that make you money
Comment from : @jesswhite8087

"sorry KIDDO"?! How disrespectful This woman is probably at least 40 years old
Comment from : @ashagriffith240

You DO NOT have to pay back 401k loans if you default It's simply treated as ordinary income with a 10 penalty Example, if she makes $70k this loan will cost her $4525 in taxes and penalties -- that's it No it's not quite $6k no they won't take it out of her 401k, and no they won't take an additional $14k to pay it off It's simply income
Comment from : @wackzingo