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You can't take out a 401k loan if you don't work there any more. In fact, that's one of the major drawbacks of 401k loans. If you leave employment, you have to
by ahepp 4y ago
You can't take out a 401k loan if you don't work there any more. In fact, that's one of the major drawbacks of 401k loans. If you leave employment, you have to repay the loan within a set time period, or treat it as a disbursement.
That said I agree, complaints about "what will happen when my severance runs out!" did elicit a bit of an eye roll.
- commandlinefan 4y agoI'd never heard that... can you roll it over into an IRA and take a loan against that?
- CoffeeOnWrite 4y agoMaybe, but have you tried getting a loan approved with no income?
- heavyheavy 4y agoIts a loan against yourself
- CoffeeOnWrite 4y agoBanks still want to see evidence of your ability to pay it back.
- loeg 4y ago401k “loans” are a misnomer. There’s no underwriting or leverage. It’s an unpenalized withdrawal with payback (as opposed to regular early withdrawals, which are penalized).
- CoffeeOnWrite 4y agoAs discussed upthread, 401k loans are not generally accessible to unemployed people.
- deleted 4y ago[deleted]
- tomatotime 4y agoYou technically cannot take out a loan against your IRA. You can do a withdrawal and payback though - I believe there are some tax considerations / early withdrawal risks