Does one have an option to take a loan from one's 401k p/s account at prevailing market rates without excessive tax penalties?...In effect , borrowing from one's self rather than the bank.?

Zip Code: dbolaji@columbus.rr.com

If your 401(k)/Profit Sharing plan allows loans, you can borrow up to 50% of your vested account balance or $50,000, whichever is less. You usually have a maximum of five years to repay the loan, unless you are borrowing for a first home, which allows a longer payback.

Generally, there is a low interest rate. You pay the rate set by the plan, which is usually a few percentage points above the prime rate.

If you don't repay the loan, it is considered a premature distribution. At that point, you would owe federal and state income taxes as well as a 10% penalty for early withdrawl (if you are under age 59 1/2).

Hope this helps.

Zip Code: lkeller@physicianfinancialservices.com

Thanks! That sure helps.
DBolaji.

Zip Code: dbolaji@columbus.rr.com