401k Loan and Employer Match

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kingjimmy
Posts: 83
Joined: Mon Aug 26, 2013 12:14 pm
Location: North Carolina

401k Loan and Employer Match

Post by kingjimmy » Tue Oct 10, 2017 4:10 am

Hi

Due to some medical issues my wife and I are considering exploring the option of taking a loan from my 401k to cover a portion of the expenses. My question is, when repaying the loan, will my employer match (6%) that I will get for my regular pre tax contributions count towards the loan repayment amount, and thus essentially reducing the amount out of pocket I’m actually paying towards the loan repayment?

Thanks

Jimmy
Jimmy

Beezthree
Posts: 164
Joined: Wed May 07, 2008 11:16 pm

Re: 401k Loan and Employer Match

Post by Beezthree » Tue Oct 10, 2017 4:52 am

Not in my experience.

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Taz
Posts: 282
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Location: Florida

Re: 401k Loan and Employer Match

Post by Taz » Tue Oct 10, 2017 5:49 am

The employer match will not count. Also, remember that the loan repayment is made with post-tax dollars.
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livesoft
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Joined: Thu Mar 01, 2007 8:00 pm

Re: 401k Loan and Employer Match

Post by livesoft » Tue Oct 10, 2017 6:33 am

Don't forget that the paycheck is where the loan repayment probably comes from, so the amount of the paycheck has to be enough to make the loan payment, make the 401(k) contribution, and perhaps pay all the other bills. That is, take-home will be lower.

EtA: When my spouse did a 401(k) loan, repayments had to come from paycheck, but see the next post, because that is not always the case.
Last edited by livesoft on Tue Oct 10, 2017 6:47 am, edited 1 time in total.
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awval999
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Re: 401k Loan and Employer Match

Post by awval999 » Tue Oct 10, 2017 6:38 am

I have a 403b loan through Fidelity.

My plan allows a direct debit through my checking account (instead of withheld by paycheck).

I'm sorry about your family's medical issues. I hope everything turns out ok!

livesoft
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Re: 401k Loan and Employer Match

Post by livesoft » Tue Oct 10, 2017 6:46 am

awval999 wrote:
Tue Oct 10, 2017 6:38 am
I have a 403b loan through Fidelity.

My plan allows a direct debit through my checking account (instead of withheld by paycheck).
Thanks for that information. I will update my previous post.
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kingjimmy
Posts: 83
Joined: Mon Aug 26, 2013 12:14 pm
Location: North Carolina

Re: 401k Loan and Employer Match

Post by kingjimmy » Thu Oct 12, 2017 6:13 pm

Thanks everyone for the feedback
Jimmy

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