Anil Vazirani discusses when retirees should, and should not, borrow from 401(k)s

March 13, 2019Financial Advisor Scottsdale AzRetirement Planning Scottsdale

https://retirementplanningscottsdale.com/2019/03/13/anil-vazirani-discusses-when-retirees-should-and-should-not-borrow-from-401ks/ Anil Vazirani discusses when retirees should, and should not, borrow from 401(k)s Per an article in Financial Planning by Andrew Shilling on March 5th, 2019, he states that taking a loan against a 401(k) plan is an easy way for cash-strapped clients to raise money, as it will require no credit check, trigger less paperwork and charge lower interest rates compared with credit cards and other financial loans, according to this MarketWatch article. However, a 401(k) loan should be a last-resort option, as it would result in an opportunity cost that can offset the interest that they will pay on the loan. Those who fail to repay the loan on time will face income taxes and possibly an early withdrawal penalty, as the unpaid loan will be treated as a taxable distribution.

Read More: https://www.financial-planning.com/news/clients-who-fail-to-pay-401k-plan-loans-may-face-tax-penalties-tax-strategy-scan

Anil Vazirani, 401k retiree loans