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401(k) Loans vs Penalties Explained | Raleigh News
Pulling money from your 401(k) before 59½ usually means a 10% penalty plus taxes—so that $10K you thought you could grab might cost you thousands more and lose all future growth. But there’s a workaround: take a loan from your 401(k). Borrow up to $50K or half your vested balance, repay within five years, and interest goes back into your account. The catch? If you lose your job, the full loan becomes due immediately. If you can’t pay it back, it’s treated as an early withdrawal—with penalties and taxes. It’s not a free pass—it demands discipline and careful planning. Before you touch your…
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