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2 Bumps

If you had two options what would you choose?

Borrowing money from your mom that you have to pay back next year and not knowing if you can afford it then

Or

Taking out a hardship on your 401k and paying the 10% interest on your next tax return

For an immediate threat to your family's primary residence.

Answer Question
 
staciandababy

Asked by staciandababy at 12:45 AM on Jun. 14, 2013 in Money & Work

Level 38 (102,010 Credits)
Answers (18)
  • I would not borrow money. I would deal with the 401K, in that situation.
    JulieJacobKyle

    Answer by JulieJacobKyle at 12:48 AM on Jun. 14, 2013

  • 401K Been there done that. It is much easier to repay imo.
    But_Mommie

    Answer by But_Mommie at 12:48 AM on Jun. 14, 2013

  • I would never take a loan from a family member that I was not sure I could pay back on time or before.
    Dardenella

    Answer by Dardenella at 12:57 AM on Jun. 14, 2013

  • I'd rather face a firing squad than borrow money from my mom. I'd suck it up and take a hit on my retirement account.
    Ballad

    Answer by Ballad at 12:59 AM on Jun. 14, 2013

  • If anyone would like to pm a personal experience with a hardship withdrawal they could. Would be so kind.

    Falling asleep.

    Like if I took out 1500 would it be like losing 3000 if it was matched by the employer?
    staciandababy

    Comment by staciandababy (original poster) at 1:04 AM on Jun. 14, 2013

  • If you borrow from your 401K, you must remember this is a loan, even if it is "your money". You'll be subjected to a monthly withdrawal on your/SO's paycheck.
    There's also a one time fee, which generally runs around 75.00 to process the loan. Which means, if you borrow 1000.00 and pay a 75.00 fee, you're losing 7.5% right off the top.
    I wouldn't borrow from my family or friends ever but making a trip to your bank might be less expensive than borrowing from your 401K.
    PMSMom10

    Answer by PMSMom10 at 1:17 AM on Jun. 14, 2013

  • I would borrow from my mom, but we have that sort of relationship. I've never not paid her back. Just agree on making payments that you'll be able to afford, and stand by your word. There's nothing worse than bad blood between family over something like money.
    Ginger0104

    Answer by Ginger0104 at 1:28 AM on Jun. 14, 2013

  • None of the two options.
    kity-bity

    Answer by kity-bity at 4:28 AM on Jun. 14, 2013

  • You can borrow from the 401-K as a loan, not a withdrawl. (no penalties on your taxes) You pay yourself back. Decide what you can afford as a monthly payment & they can payroll deduct it. It can help if you are paying down those medical bills, as long as the loan payment is less than the monthly payment for the expenses you've been paying. GL
    mrsmom110

    Answer by mrsmom110 at 6:45 AM on Jun. 14, 2013

  • I do not borow money from people. I would do the 401K. I am borowing from myself.
    louise2

    Answer by louise2 at 6:48 AM on Jun. 14, 2013

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