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FedEx Freight | Can’t get a loan in the new 401(k) plan ??

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Streaker69

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DOTFXF said:
Stayed. Could that be the reason loans are still available?.
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It looks like it. I went with the higher company match and I don't have access to anything. I can't change my contribution, no loans and no withdrawals. It says I have to call if I have any questions.
 
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Tigerman1

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Streaker69 said:
It looks like it. I went with the higher company match and I don't have access to anything. I can't change my contribution, no loans and no withdrawals. It says I have to call if I have any questions.
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That’s exactly what I’m getting Starting to wish I stayed the same now
 
Jaloc

Jaloc

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As much as we make we shouldn't need loans cmon? Force yourself to save something every week I put $300 a week in savings along with $125 a week in Roth IRA and my 401k allows 5% after tax.
 
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Citori_cx

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Wow the reading comprehension in here. I mean I know we are truck drivers but wow. You can still take a LOAN out of your 401k. Just call vanguard and they will email you all of the information in a link you just click. Doing it online is much faster and the charge to get the loan is only 50 bucks. I just went through this although I didn’t end up actually following through with getting the loan but did call them and find out all the info I just described to you. I hope this answered the question although I’m sure the input from all the financial advisers and life coaches in here was great.
 
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Streaker69

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Jeff said:
Huge tax hit plus if you terminate employment with he company the balance is due in full I heard, Correct me if I am wrong
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Taking a loan against your 401K is not a taxable event. It's a secured loan with your 401k as collateral, not a withdrawal. If you terminate employment, the full amount becomes due. If you don't repay it, it becomes a withdrawal and then it's a taxable event. When you roll your 401k over or cash out, they roll or pay the amount left after they take what they're owed.
 
Jeff

Jeff

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Streaker69 said:
Taking a loan against your 401K is not a taxable event. It's a secured loan with your 401k as collateral, not a withdrawal. If you terminate employment, the full amount becomes due. If you don't repay it, it becomes a withdrawal and then it's a taxable event. When you roll your 401k over or cash out, they roll or pay the amount left after they take what they're owed.
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there ya go ... 401k would be the last place I would borrow if I was the borrowing type.
 
S

Streaker69

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Jeff said:
there ya go ... 401k would be the last place I would borrow if I was the borrowing type.
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I actually prefer it. I needed money during COVID shutdowns because the hours got cut, but the bills kept coming. The loan had a 3% interest rate and had no impact on my credit, whereas racking up a credit card (with hours cut/cc days paycheck) or taking an outside loan would've had a higher interest rate and a negative impact on my credit. I paid back 20 dollars a paycheck for 2 years, no biggie and it got me out of a hole fast. I had the option to pay it off faster, but I didn't.

To each his own, but there isn't anything wrong with taking a loan as long as you don't plan on leaving.
 
Jeff

Jeff

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Streaker69 said:
I actually prefer it. I needed money during COVID shutdowns because the hours got cut, but the bills kept coming. The loan had a 3% interest rate and had no impact on my credit, whereas racking up a credit card (with hours cut/cc days paycheck) or taking an outside loan would've had a higher interest rate and a negative impact on my credit. I paid back 20 dollars a paycheck for 2 years, no biggie and it got me out of a hole fast. I had the option to pay it off faster, but I didn't.

To each his own, but there isn't anything wrong with taking a loan as long as you don't plan on leaving.
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I don't borrow money anymore, only money I have borrowed in the last 20 years was for my house which I paid for in 5.5 years.
 
pltjack

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Streaker69 said:
I actually prefer it. I needed money during COVID shutdowns because the hours got cut, but the bills kept coming. The loan had a 3% interest rate and had no impact on my credit, whereas racking up a credit card (with hours cut/cc days paycheck) or taking an outside loan would've had a higher interest rate and a negative impact on my credit. I paid back 20 dollars a paycheck for 2 years, no biggie and it got me out of a hole fast. I had the option to pay it off faster, but I didn't.

To each his own, but there isn't anything wrong with taking a loan as long as you don't plan on leaving.
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Another thing to consider is the money that you took out of your 401K isn't working for you anymore.
 
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Streaker69

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pltjack said:
Another thing to consider is the money that you took out of your 401K isn't working for you anymore.
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I guess it depends on how much you borrow and how long until you retire. The money I borrowed wasn't enough to make that big of a difference and I'm far from cashing out. The credit hits would have had more negative effects than borrowing the money.

It also has to do with how I handle money. I put as much into my 401k as I can to reduce taxable income. I also overpay in taxes and I don't do savings accounts. I think savings accounts are a losing game where banks make money and you get squat. Anything left over at the end of the week goes to the investment account and I don't touch that.

That's my take on it and I'm not an accountant. I did simple math and that's what worked for me.
 
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