Over the last few months, we have been notified by several Nucor locations about an uptick in 401k loans and hardship withdrawals. I think it’s time for a quick review of the negatives. When you borrow from your retirement account, you lose potential investment growth and the compounding effect on that money, which can significantly reduce your future nest egg over time. If you leave your job, the loan becomes due quickly, and failure to repay it can result in taxes and early withdrawal penalties. Worse yet, loan repayments are made with after-tax dollars, meaning you’ll be taxed again when you withdraw the money in retirement. The psychological effect of relying on 401(k) loans can also create a habit of treating retirement savings as a short-term safety net rather than a long-term priority. In almost every instant, loans/withdrawals should be a last resort after exploring other financial options. That’s why having an emergency fund is so important!
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Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services are separate from and not offered through Commonwealth.
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Don't Rob from your Retirement
January 19, 2026