While it may seem like a great idea to borrow from your 401(k) at the time, you definitely want to reconsider before taking out that loan.
Reasons you shouldn’t borrow from your 401(k)
People who borrow from their 401(k) generally stop contributing to it all together
Taking out a loan can affect how much you can afford to contribute to your retirement plan. Almost half of the people who borrow from their 401(k) reduce how much they contribute to the plan while repaying the loan. This can have a huge effect on the amount of money you’ll have in your retirement savings.
There’s a high chance you’ll borrow more than once.
There’s a 50% chance that if you’ve borrowed from your 401(k) you will do it again. Every time you borrow you lose time for your money to grow, significantly reducing what you’ll have to live on during your retirement. So, you’ll either have to work more years or not have as much fun in retirement.
Read more: How to maximize your 401(k) savings