The main disagreement facing borrowing from the bank off an effective 401(k) try shed funding return. The cash borrowed try paid back which have a predetermined amount of desire in place of a probably high come back out of inventory and you may bond investments. Although this is theoretically correct to the interest payments into the 401(k) finance, so it disagreement are however unimportant. Fund was paid which have just after-taxation cash whether or not he or she is 401(k) funds otherwise loans (home loan and you will household guarantee money try exceptions). Furthermore, earnings into the an excellent 401(k) is taxed in the withdrawal it doesn’t matter if the profits are from financial investments inside the holds or securities otherwise from a loan into account owner (money commonly taxed having Roth 401(k)s). Continue Reading »