Author Topic: Loan on a Solo 401K - Where can I do this?  (Read 3184 times)

SunshineGirl

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Loan on a Solo 401K - Where can I do this?
« on: November 28, 2013, 08:46:40 AM »
Being able to take a loan against one's Solo 401K balance is possible as long as the institution offering the Solo 401K allows it.

My question: Are there any large institutions that do? I've checked Vanguard, Schwab, Fidelity, T. Rowe Price, and none of them do. I wouldn't want anyone other than a large financial institution.

Whether one should or not is another question. Mine is, "Who offers this?"

brewer12345

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Re: Loan on a Solo 401K - Where can I do this?
« Reply #1 on: November 28, 2013, 09:02:02 AM »
I was under the impression that Fidelity offered this.  No longer the case?

SunshineGirl

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Re: Loan on a Solo 401K - Where can I do this?
« Reply #2 on: November 28, 2013, 09:15:02 AM »
No, I chatted with a rep there yesterday. That was the one I'd thought did it, too.

ASquared

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Re: Loan on a Solo 401K - Where can I do this?
« Reply #3 on: November 29, 2013, 09:52:52 PM »
Why do you want to do this - have you explored other options?

arebelspy

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Re: Loan on a Solo 401K - Where can I do this?
« Reply #4 on: November 30, 2013, 07:46:22 AM »
No, I chatted with a rep there yesterday. That was the one I'd thought did it, too.

Try another rep to double check.  Sometimes people get stuff wrong.

I did find some companies that do solo 401k loans, but not the large institutions, like you mentioned.

Some discussions on Bogleheads have a few different options if you're willing to be flexible and absolutely have to have a solo 401k loan.
« Last Edit: November 30, 2013, 07:51:05 AM by arebelspy »
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SunshineGirl

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Re: Loan on a Solo 401K - Where can I do this?
« Reply #5 on: November 30, 2013, 01:22:43 PM »
As to why I want to do this, I'm not sure I do, but I foresee several scenarios in the next few years where I might want to have a chunk of cash up front and pay it back quickly -- but I want to avoid taking a loan against my house or using up cash on hand.

My situation is that our tax rate will definitely not go down when we retire and might, in fact, go up as minimum distributions are factored in. As such, I don't mind having a portion of tax-deferred assets in a cash or cash-like investment, which could then be used for loan purposes. What I want most to grow are my Roth assets and my non-tax-deferred assets.

I suppose a HELOC would serve many of the same purposes, but I really prefer not to borrow against the house. It may be a comfort-level vs. what makes the most sense. 

rocketman48097

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Re: Loan on a Solo 401K - Where can I do this?
« Reply #6 on: December 03, 2013, 09:35:29 AM »
Sunshine girl, it's very unlikely your tax rate will go up in retirement.  I think you need a deeper understanding of the tax code, for 99% of people, their tax rate will be the same or go down in retirement. 

Are you sure you understand the US tax system?  Don't take out a 401k loan, solo or not, ever is my advice.  Instead, make smaller contributions and have more money available in taxable investments if that's a concern of yours. 

 

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