What Is The Impact Of Borrowing From My 401(k) Plan?

Many people borrow from their company-sponsored 401(k) plan to pay off high interest debt or to make a major purchase. Although the borrowing rates may be favorable, usually 1-2% above the prime rate, the impact on future retirement earnings needs to be taken into account. Use this calculator to help you make your decision.


401(k) Loan Assumptions
Amount you intend to borrow ($)
Interest rate on 401(k) loan
Term of 401(k) loan: (years) Be sure to enter a number less than the number of years until retirement (below).
Before-tax return on 401(k) funds
Years until retirement
Use proceeds to pay down debt?
Debt Detail (If 'Yes' Above)
Interest rate on debt
Is the interest deductible?
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.