The 401(k) Temptation and Trap
The 401(k) is a retirement plan established in 1978 to help workers whose companies no longer offered pensions. The idea was that workers could draw monthly allotments from the amount saved once they reached retirement age.
The temptation for many people who are struggling to accumulate a savings account is to view the money sitting in a 401(k) as a "honey pot". While the IRS does have a number of provisions that allow a person to give into their temptations and take a loan against the retirement savings, many people are not aware of the serious trap that this borrowing could land them in. Consider these three consequences:
1. Money place in a 401(k) is not taxed until it is taken out at retirement. However,
The 401(k) is a retirement plan established in 1978 to help workers whose companies no longer offered pensions. The idea was that workers could draw monthly allotments from the amount saved once they reached retirement age.
The temptation for many people who are struggling to accumulate a savings account is to view the money sitting in a 401(k) as a "honey pot". While the IRS does have a number of provisions that allow a person to give into their temptations and take a loan against the retirement savings, many people are not aware of the serious trap that this borrowing could land them in. Consider these three consequences:
1. Money place in a 401(k) is not taxed until it is taken out at retirement. However,