This article was originally published on U.S. News by Kristin McFarland, Wealth Advisor at Darrow Wealth Management. Most people who borrow against their retirement account will never fully recover.
One advantage of many tax-deferred 401(k) plans is the option to take out a loan against a portion of your vested balance. Although you may be able to take out a loan for a number of reasons depending on your plan, deciding to do so should really be an ultimate last resort. Research has shown that borrowing from a retirement plan tends to have a lasting impact – most accounts never get back to their projected pre-loan balance at retirement.
