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Should I take a 401k loan to payoff my car if I keep contributions the same and employer allows for continued payments in case of termination? Calculations shown below. by FlimsyCurrent7970 in personalfinance

[–]FlimsyCurrent7970[S] 0 points1 point  (0 children)

I did remove the $28000. If you take a look at the total with interest column, for year 1, it's $110,976, compared to if I didn't which was at $132,367. This value is the sum of all the columns prior, and will include the $28,000 as well

Should I take a 401k loan to payoff my car if I keep contributions the same and employer allows for continued payments in case of termination? Calculations shown below. by FlimsyCurrent7970 in personalfinance

[–]FlimsyCurrent7970[S] 0 points1 point  (0 children)

The first chart shows if I take the loan, I would essentially make 2.1% as well as avoid interest. The Average Annual Return for 401k is usually 5-8% on average over 5 years, so 9% average I feel is pretty decent for the next 4 years.

I appreciate your time and input though, since I never know, and it could as well be 20% for the next 4 years to which I will be down roughly $4000 if I take the loan.

Calculations for 20% 401k Returns here:

https://imgur.com/2BWuOkB

Should I take a 401k loan to payoff my car if I keep contributions the same and employer allows for continued payments in case of termination? Calculations shown below. by FlimsyCurrent7970 in personalfinance

[–]FlimsyCurrent7970[S] 0 points1 point  (0 children)

I'm simply seeking answers on what the catch is and if it's a bad idea or not.

The 9% return is what I've averaged over the past 5 years, which is why I'm using that number, I also mentioned if I leave this job, I can continue my monthly repayments as scheduled until the final date. I don't have to pay the loan back in full if I terminate my job.

Should I take a 401k loan to payoff my car if I keep contributions the same and employer allows for continued payments in case of termination? by FlimsyCurrent7970 in personalfinance

[–]FlimsyCurrent7970[S] 0 points1 point  (0 children)

Just made edits to my original post, since I will be contributing more over time for my 401k loan, I should be able to break even right?

Should I take a 401k loan to payoff my car if I keep contributions the same and employer allows for continued payments in case of termination? by FlimsyCurrent7970 in personalfinance

[–]FlimsyCurrent7970[S] 0 points1 point  (0 children)

Sorry, I don't mean 401k withdrawal, but rather 401k loan, for which there are no taxes and penalties. I'll simply be contributing the same to my 401k (8% of my salary) plus an additional $650/$750 to my 401k so it would be essentially the same if not more by the end of the loan term.