My 401k is through fidelity, so I borrow money from my 401k, I pay back myself, plus I pay myself interest (confused why i need to pay myself interest as a side question). No taxes, or penalties. What's the catch? Just that I miss the market move on the money I borrowed?
I dont believe now is a great time to pull money out and miss the recovery I expect leading into the end of the year. But when I expect a top has been put in, taking out a 401k loan, could help me avoid the drop? As it would be like selling the top, and as I pay back the loan, buying the dip.
Do they need to see the loan was specific for something, or can i just get cut a check? With no taxes or penalties, I could roll 12k of that money into me and my wife roth? (Can manage my roth more day to day then a 401k. Time in the Market, I know, but I like to trade around a core strategy with my long term positions, and it works for me.)
Only risk I see is with the loan is employment, anything could happen, but I'm union, and 3rd in seniority so It's not a concern. What other catch am I not seeing?
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