RV Financing
Ok, this is a little different situation, but wondering if anyone has ever tried to do this. We currently own a Montana 5th wheel, and we financed it through my 401k. We still owe $35,000 on the loa...
Forum Discussion
Here's an interesting article and excerpt from an article about the hazards of a 401(k) loan:
If you do not repay your 401k loan back to your retirement plan, there are huge penalties involved. Non-payments are considered early 401k withdrawals, and as such they are subject to a 10% if you have not reached the age of 59 1/2 years-old. You will have to report the withdrawal as ordinary income on your tax return and not as investment income. If you are in the 28% tax bracket, this means you will pay 38% to the Federal Government and then state taxes which can be approximately 10% (depending on your state). Your loan could end up costing you almost 50% in taxes and penalties.
Full Article:
401(K) Loans
If you do not repay your 401k loan back to your retirement plan, there are huge penalties involved. Non-payments are considered early 401k withdrawals, and as such they are subject to a 10% if you have not reached the age of 59 1/2 years-old. You will have to report the withdrawal as ordinary income on your tax return and not as investment income. If you are in the 28% tax bracket, this means you will pay 38% to the Federal Government and then state taxes which can be approximately 10% (depending on your state). Your loan could end up costing you almost 50% in taxes and penalties.
Full Article:
401(K) Loans
