If I were to take out a $10,000 loan against my 401(k) with a 6 percent interest rate over 24 months, how much would my taxes be at retirement to pay on this loan's principle and interest of this loan?

If I were to take out a $10,000 loan against my 401(k) with a 6 percent interest rate over 24 months, how much would my taxes be at retirement to pay on this loan's principle and interest of this loan?

Debt, Retirement, 401(k), Taxes
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The money will be treated as taxable income in retirement just like the rest of your 401(k). Withdrawals from your 401(k) will be taxable income regardless of whether the money came from your other investments, the loan principle repayment, or the loan interest. Effectively, the 401(k) loan will not impact your retirement taxation. 

When you take a loan against your 401(k), you actually don't take your money out of the account. Instead, you invest in a debt instrument with yourself as the borrower. It's just like if you own treasury bonds you would be invested in a debt instrument with the government as the borrower. If you do decide to take a loan against your 401(k) you will see the loan listed as an asset within your 401(k).

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September 2018