DX has described this process to me -- borrowing from your own 401K. And because you're paying yourself back with interest, you're only benefitting yourself.

Yup. I did this to borrow the down payment for my house, and when that was paid off, I took out a new loan to pay off the cradit card bills I ran up once I bought the money pit, since I was already acclimateded to having the payments deducted from my paycheck. Far better to be paying the interest to yourself than to a bank.

The rules on our 401K don't specify what the loan has to be for.

I would be wary about what happens to a loan againt your 401k if you leave your job.

I hate money. I really do.

I can read, and I am so going to kill you. I am not linked to any fucking celebrities!

Pshaw. You're just projecting. I'm totally not talking about you.

I would be wary about what happens to a loan againt your 401k if you leave your job.

That is a concern. The loan period is typically five years (unless it's for a house, when it can go longer). If you leave the plan before then, the loan comes due immediately. I assume that if you can't pay it off, it becomes an early withdrawal, so there will be penalties and taxes. My job is stable, and I pretty much plan to stay here til I retire, so it's not a problem for me.

The loan period is typically five years (unless it's for a house, when it can go longer).

Well, so much for that. My job is stable, but it's just not normal to be around that long, given I have no idea when the bubble would burst (like 4 years from now, or whatever).

I'll just put away some pre-tax, but not with house in mind. I can borrow against it anyway, to supplement, I guess.

Just think -- if I had more money, I could get a financial advisor to do this instead.

I would be wary about what happens to a loan againt your 401k if you leave your job.

That is a concern. The loan period is typically five years (unless it's for a house, when it can go longer). If you leave the plan before then, the loan comes due immediately. I assume that if you can't pay it off, it becomes an early withdrawal, so there will be penalties and taxes. My job is stable, and I pretty much plan to stay here til I retire, so it's not a problem for me.

For a mortgage, you can generally take a disbursement, rather than a loan, without penalty. So leaving a job doesn't factor in. On a loan, you're right, whatever's outstanding needs to be paid back (I believe within the tax year) or it becomes the bad kind of disbursement, where you do get hit with a 30% penalty.

I'll just put away some pre-tax, but not with house in mind. I can borrow against it anyway, to supplement, I guess.

Most companies will match a small amount of your contributions to 401k plans, such as the first 4%. So at the very least, you should be putting in that much, 'cause it's automatically doubled. If you're not contributing enough to get the match, you're basically turning down free money.

Space Zombies and 401(k)s, eh?

The BF reviewed Lisah's (awesome) CD.

Great review and now I want Lisah's CD. Tell him to get to work on reviewing my book, now.

That is a concern. The loan period is typically five years (unless it's for a house, when it can go longer). If you leave the plan before then, the loan comes due immediately. I assume that if you can't pay it off, it becomes an early withdrawal, so there will be penalties and taxes. My job is stable, and I pretty much plan to stay here til I retire, so it's not a problem for me.

I left my job with a few payments left on my 401K loan. They let me pay off the balance in the already scheduled payments under the current terms. I suspect this may vary from company to company, and it may depend on the size of the account.

So at the very least, you should be putting in that much, 'cause it's automatically doubled. If you're not contributing enough to get the match, you're basically turning down free money.

True -- where I work, 50% of your allocation is matched to a maximum of 3% of your gross salary.

However, if I need to save both for retirement and a house, it mightn't (and I'm saying this without having looked at my numbers) it might behoove me to have somewhat less money saved post-tax instead of the maximum pre-tax.

This was so much easier in MI when I really didn't want a house.

I hate money. I really do.

I share your hate, I really do. Personally, I adore the widget in my head that beats me up for not being financially responsible enough. And I'm pretty fucking stable and debt free. I'm just...lame.

I'm only one generation removed from people who kept their life savings in a winter coat. In the henhouse.*

It shows.

* this proved to be a Very Good Thing when the house burned down. They had to restrain my grandfather from rushing into the burning house after the coat. He started laughing hysterically when grandma told him she'd moved their winter storage from the basement to the henhouse years previously.