By Skyline On Saturday, December 31 st, 2016 · In , , , ,

FIELD NOTE: JANUARY 2017

BORROWING AGAINST YOUR 401(k)

image

Twenty-nine percent of Americans have borrowed from their retirement savings, and 13% have borrowed on more than one occurrence. While it appears to be a good source of “low interest” financing, a single $30,000 401(k) loan could result in an opportunity cost of $25,000 in compounded returns (assuming the loan is repaid in 5 years). Potential losses are significantly greater if 401(k) contributions are reduced or suspended to accommodate for loan payments. It is essential to financially prepare for emergencies and major expenses to avoid the costly reparations of borrowing from retirement savings. As we welcome 2017, a New Year’s resolution to increase emergency and large purchase savings may be most pertinent.

Sources: TIAA-CREF 2014 Borrowing Against Your Future Survey

To read more about 401(k) loans, click here.

image
image
image
First Quarter Market Review 2018

First Quarter Market Review 2018

Update: The Fiduciary Fight

Update: The Fiduciary Fight

Working After 65: Future or Fallacy?

Working After 65: Future or Fallacy?

The Price of Pink

The Price of Pink

Fourth Quarter Market Review

Fourth Quarter Market Review

2018 Tax Update: Tax Cuts and Jobs Act

2018 Tax Update: Tax Cuts and Jobs Act

Financial Resolutions

Financial Resolutions

Can Money Buy Happiness?

Can Money Buy Happiness?