Need 401k loan what to do plz asist ?

lew401k

i have invested in a retirement plan now i need a loan can i withdraw it form this account or i have to go some other options .....?

ceh209

Before someone jumps on you and goes 'whoa, that's a massive loan!', are you in the United States? I seem to remember pension plans there being called 401's, or similar?

This is a UK site and people aren't likely to know much about US pensions I'm afraid.:(

DCFC79

THe OP posted this on the savings board so i wonder if he is from the UK

antrobus

ceh209 wrote: »

Before someone jumps on you and goes 'whoa, that's a massive loan!', are you in the United States? I seem to remember pension plans there being called 401's, or similar?

This is a UK site and people aren't likely to know much about US pensions I'm afraid.:(

Yup. US citizens can invest in a tax deferred pension type investment vehicle under Section 401, paragraph k of the Internal Revenue Code, hence 401k plans.

gglaze

401k is effectively the US equivalent of what we use ISA and/or SIPP for in the UK - i.e. self directed "pension" plans.

There are also IRAs (Individual Retirement Account?) which serve as longer-term accounts that you can transfer funds to, out of a 401k, still in the "pre-tax" scope, so that it won't be treated as a withdrawl from your retirement fund. This helps solve the problem that usually 401k accounts are set up for you when you work for a particular company, and every company you work for (in the US) may use a different provider (money manager) for their 401k accounts for employees. So when you work for and then leave a company, several times, you can end up with a mess of retirement funds in several 401k accounts, from different providers with different websites, different offerings for mutual funds or stocks you can invest in, etc. So with an IRA, you can consolidate those multiple 401k funds into a single account that is not linked to a particular company you worked for. I think this is specifically a "Rollover IRA" or "Roth IRA" or something - can't remember which I have, maybe both. Anyway, that's how it works in the US.

OP - are you looking to just get a short-term loan and 401k is the only "collateral" you have at your disposal? I suppose a bank might be willing to give you a secured loan, with an agreement that your funds in 401k become the collateral? Presumably that would be the amount you have in your fund, minus the 10% penalty or whatever it would be, if you were required to withdraw early to cover the collateral. I'm not sure if banks have a standard way to use 401k as collateral, but I can't see why not?

Are you looking to do this in the UK? That could be more tricky.

Or are you looking for something more like a long term loan, i.e. effectively using a loan as a way to get an "early withdrawl" of your retirement funds? It's an interesting idea, but surely defeats the whole purpose!

And again I'm curious if this has anything to do with you being in the UK, or if you are simply in the US and trying to get access to your 401k funds.

I've looked for a long time for a solution to consolidate my retirement funds from the US and the UK into a single account - for example somehow transfer my IRA holdings over to my UK ISA or SIPP account. So far haven't found a good solution to this, and so I just have even more accounts to manage.