Anthony wrote:
- quote -

Can you repay the loan within 1 year? If not, I would think you need
to change some financial habits to better account for situations like
this.

I do not think 401k loans for car repairs is a good choice. How much
is the car repair? What kind of car (how old)?

Anthony wrote:

- quote -

The IRS allows you to borrow $10K or 50% whichever is more, I believe.
You should check if your employer has any further restrictions. You must
pay it back over 5 yrs.
Given how tough it is to accumulate 3 months (or 6 months) worth of
expenses, and still have money to save in one's 401(k), the use of a
401(k) loan in lieu of the emergency fund may be right for some people.
It's a bit riskier, as if you are let go, you may have to pay back the
loan in full out of the 401(k), but if the deposit gets you the match,
and you are likely in a higher bracket when making the deposit that the
year you are laid off, it's a risk that may be worth taking, if the
money (loan) is used strictly for emergencies.
JOE

In article <KzO_g.13297$XX2.2888[at]dukeread04> ,
"Anthony" <aevansjr3[at]hellno.cox.net> wrote:

- quote -

Some 401K plans allow you to take loans against your balance.
Not all do. It is somewhat dangerous because if your jobs
ends, the loan becomes due. If you cannot pay, then it is
treated as income, and you have a big tax bill.

I doubt that you can get a distribution from the 401K without
quitting your job. If you have an old 401K somewhere else, you
can roll it over, and then use the money for up to 60 days (once per
year, in fact). If you are late on the 60 days for any reason,
including reasons that are not your fault, the money is treated
as income and you get a huge tax bill.

Do you have a credit card? That is one option. The high rate
of interest is better than spending a million dollars fixing a
car. What do I mean spending a million to fix you car? Well,
if you are relatively young, taking a $1000 out of retirement
savings can have a million dollar impact at age 70. Think about
that very hard, is your car worth a million? Will your car last
until you are 70? If not, then don't spend retirement money on
it.

You could also rent a car, maybe take the bus, maybe car pool,
or pay someone at work to pick you up, or borrow a car from a
relative. There are lots of options. You just have to want
it badly enough, and not be looking for an easy way out.

-john-

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================================================== ====================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
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My car broke down and I am needing money to fix it. Is thier anyway to
borrow against my 401k or get enough money out to fix it? I know about the
penaltys but right now if I dont get it fixed then I wont make any money
anyway so gotta do what I can any advice?