bruceb58
Supreme Mariner
- Joined
- Mar 5, 2006
- Messages
- 30,545
Re: Refinance boat loan
http://www.mymoneyblog.com/double-taxation-and-the-real-reasons-401k-loans-are-bad.html
When I was young and didn't know any better I did one of these loans. Sometimes, I actually learn from my mistakes!
When you withdraw the money, it gets taxed again. You basically got taxed twice on that money. Won't even talk about the gains you would have lost in the 401K. If you took out a 401K at the beginning of this year, you would have lost over 25% in gains.How do you figure? There was no tax or penalty on the money borrowed coming out. Income earned after 401 deduction would be taxed with or w/o this loan. Then because of DTIR this loan rate was 9% lower than I could have gotten from my bank. Plus most of this interest paid is being paid back into the 401k account. So basically you are paying interest to yourself.
http://www.mymoneyblog.com/double-taxation-and-the-real-reasons-401k-loans-are-bad.html
When I was young and didn't know any better I did one of these loans. Sometimes, I actually learn from my mistakes!
Last edited: