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How much is my balance of my 401k?

Wanting to know the balance of my 401k so I can buy a house

Mar 15, 2012 by David from Ravenna, OH in  |  Flag
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You should check with your plan administrator. The plan administrator should a valuable resource to utilize to discuss available balances and options. The best part about a 401k loan is that you don't have to qualify for it. You simply fill out an application with your plan administrator. 401k loans do have borrowing limits. You may only borrow up to half of your 401k balance, and the maximum limit is $50,000. Another plus is that your loan repayments are automatically deducted from your paycheck. Typically, most 401k loans must be repaid in five years. However, home loan repayment schedules are longer, commonly 10 years, once again, check with your plan administrator. But, there can be some downsides to borrowing from your 401k plan. First of all, you need to be fairly sure that you will remain with your current employer for the life of the loan. The reason is that when you leave your job, you will need to fully repay the loan. If you cannot, it will be designated as a withdrawal and you may owe taxes and penalties. Second, you will pay double taxes on the money you repay. The money deducted from your paycheck to repay your loan comes out after taxes, and you will again pay taxes on the money when you withdraw it at retirement. Third, you should expect to pay a fee for the privilege of borrowing. Most plans charge an origination fee, and a smaller number of plans may charge an ongoing loan handling fee. Also, make sure that you can afford the mortgage on the house after the 401k loan payment is deducted from your paycheck.

Comment   |  Flag   |  Mar 16, 2012 from Lititz, PA

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