Is it true that we can take out 50k every 12months from our 401k towards primary residence loan? The Fidelity lady told me twice its true and I am still wondering if it's true.
Even if true, it's a terrible idea.
It is true that you can take out, the frequency term is not sure though. I assume you understand how much 401K you need to pile for 50K loan(certainly more than 100K)
Either you have poor listen skills or Fidelity doesn't know what they are talking about. The max outstanding loan about on any 401k is 50k total. Purpose doesn't matter. Interest you pay goes to you at prime plus. You CAN take out a hardship withdrawal for a primary residence but you pay income tax plus an additional 10% penalty. https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-loans
Fidelity has all this information available on their website. Did you try there and see if you get a different answer? 🙄
You can take out a 401K loan for up to $50K for PURCHASE of a principal residence, with a term of up to 15 years. No penalty for early prepayment, repaying of loan is through paycheck. Max outstanding balance of loan(s) against 401K is $50K in the aggregate.
Know this difference - When you tap into your 401k you are ‘loaning’ against your 401k not withdrawing permanently. Which mean you have to payback with an interest that goes back into your 401k. Fidelity might have not made that clear to you.
Yes, but the interest goes into your 401k. It is only a reasonable plan if you are already maxing out your 401k and can't beat the interest rate they are charging on the open market. The reason this strategy sometimes fails is that if you lose your job for any reason, you must pay it back at that time.
I never said that it is a good strategy. In fact, when you pay that interest to the plan, the interest paid is an after tax money that you now throw in 401k which will be taxed again at the time for retirement withdrawal.
Yep but don't obviously
You would need 100k in 401 k to do that. Do you have that much money already? Does Expedia match 1000% of your salary? Please tell me if this is true.
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Maybe ask them a 3rd time?