I don't know whether I was smart to do so, but I borrowed the max allowed from my 401K this very evening. My check should be in the mail within a few days. Starting my cafe is my future. If I make the income my cafe projects, I'll be able to put together a better future than a 401K at my current job could really offer. That, and I'm not likely to remain employed long - not by choice, but not something I'm opposed to. I could use the unemployment to get the cafe going. At the rate the allowed collection time is expanding, I'll be retirement age before it runs out. Working a day job makes starting a better job challenging, that's for sure. Anyway, I rambled. If you need money to finance a startup, and you have it in your 401K, it seems like a good deal to me.
I do have a question though. I'm going to make up numbers.
My entire 401K Account = 10,000
I borrow 5,000
I lose my job.
What happens to the other 5,000? I don't understand how the penalty system works. They say you get penalized on the amount of your loan. But, I would imagine that you'd receive the other half of your 401K? At least your vested allowance? If the other half disappears, while I get penalized to no end on the little bit I borrowed, that hardly seems right, but, when something hardly seems right, it's usually the case.
Making limitless possibilities much more limited.