I’ve been hearing a lot of concern around Nucor Divisions lately about the dramatic increase in the number of 401k loans. I just want to take a moment and remind you that this is not “free” money. Remember, when you take a 401k loan, your TAKE HOME pay will be reduced each week to repay the money back in to your 401k. While the money is on “loan” to you, IT IS NOT INVESTED! That means no potential dividends, compound interest or market appreciation on your money! That could be a huge loss long-term. In addition, and maybe worst of all, you pay taxes TWICE on every dollar you loan yourself. You repay the loan with AFTER tax wages, then you get taxed again after you retire and take those dollars as income! There are other negatives we don’t have space to mention but I think you get the picture…we aren’t fans of 401k loans! Your CalmWater Advisors are happy to discuss other options when you need funds that may offer more tax efficiency and reduce the negative impact on your retirement savings.
CalmWater Financial Network®, 3204 W Benjamin Ave, Suite 200, Norfolk, NE 68701 ~ (402) 371-5511
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.