401k Plan Loans - An Overview

Written by Rick Meigs, Publisher, 401khelpcenter.com


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There are generally four reasons given to avoid 401k loans if possible:

* Lower investment return. According torepparttar General Accounting Office,repparttar 112651 interest rate you pay yourself on your plan loan is often less thanrepparttar 112652 rate your plan funds would have otherwise earned, and you loserepparttar 112653 benefits of compound interest. * Smaller contributions. Because you now have a loan payment, you may be tempted to reducerepparttar 112654 amount you are contributing torepparttar 112655 plan and thus reduce your long-term balance. * If you quit working or change jobs, you must pay backrepparttar 112656 loan right away. It's not uncommon for plans to require full repayment of a loan within 60 days of termination of employment. If you don't repay,repparttar 112657 loan is considered defaulted, and you are taxed onrepparttar 112658 outstanding balance, including excise taxes in many cases. * Repayment of principal and interest is made with after-tax dollars. By contrast, a home equity loan from a bank is often structured so thatrepparttar 112659 interest you pay is tax-deductible. On a larger loan, this could add up to significant savings.

Go to www.401khelpcenter.com for more information on this and other 401k issues.

Mr. Meigs is the founder and President of 401khelpcenter.com, LLC a three-year-old Internet Company based in Portland, Oregon. It is a leading provider of information, opinion, analysis, news, rules, and other 401k resources for plan sponsors, small businesses, and employees.


Personal Finance Worries?

Written by John Q. Miller


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Fear Creates Worry

"Greed is good!" says Gordon Gecko (Michael Douglas) in Wall Street. Recent investment losses, corporate scandals, and a stagnant economy refute that statement. Instead, a warning is emerging in personal finance forums as we search and hope for indications that relief is in sight. Fear is bad! Fear has driven many investors either to dump stocks and load up on bonds, certificates of deposit and other conservative investments or, even worse, to stop saving and investing. This creates new problems. People will be incapable of achieving their long-term financial goals because their portfolio may now be so conservative that it won't deliverrepparttar returns needed to retire in comfort, or they are simply saving too little. Faced with this fear and uncertainty, financial knowledge is more important than ever. Instead of reacting torepparttar 112650 market’s ups and downs, learn more aboutrepparttar 112651 characteristics of stocks, bonds, and other investments; as well asrepparttar 112652 broad array of personal finance and money management topics.

------------------- About The Author -------------------

This review is courtesy of John Q. Miller at http://www.JQmarketing.com where you can find out how to create your own (no writing required) newsletter and earn multiple streams of Internet income.

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