What Is The Impact Of Borrowing From My Retirement Plan?

Many people borrow from their employer-sponsored retirement plan to pay off high-interest debt or to make a major purchase. Although borrowing rates may be favorable, usually 1-2% above the prime rate, the impact on future retirement earnings can be significant and needs to be taken into account. This calculator can assist you in estimating that impact


Loan Assumptions
Amount you intend to borrow ($)
Interest rate on loan
Years until retirement
Term of loan (in years) Term must be less than years until retirement.
Anticipated pre-tax rate of return on retirement plan account
Will loan proceeds be used to pay down existing debt? If you answered "Yes", please complete the following:
Annual interest rate on debt to be paid down
Is the interest deductible?
Your marginal tax bracket

This information may help you analyze your financial needs. It is based on information and assumptions provided by you regarding your goals, expectations and financial situation. This service shall not infer that the company assumes any fiduciary duties. In addition, such service should not be relied upon as the only source of information. This information is supplied from sources we believe to be reliable but we cannot guarantee its accuracy. Hypothetical illustrations may provide historical or current performance information. Past performance does not guarantee nor indicate future results.