Latest / The Jon Sanchez Show / The Pros, The Cons and The Rules of a 401(k) Loan
Transcript
- Jon G. Sanchez, CEO: Good Monday afternoon to you. Welcome to the Jon Sanchez Show on Newstalk 780K, which it's a pleasure to be with you. But don't take this offensively. It's more of a pleasure that the stock market is closed for the day. How about that? Oh my goodness. Let me set the stage here for you real quickly. Who would have ever thought where you had some very, very harsh words coming out of the president against Iran, where you had oil gaining over $3 a barrel, You had a Fed Chairman speak and many other headlines to deal with today and we finished the day with a gain of 50 points on the Dow. Never in my right mind would I have ever anticipated that that strength in oil, forget about everything else I just mentioned, but with that strength of oil, you would see a gain in the Dow Jones Industrial Average. Now we got hit pretty good on the NASDAQ side, but the Dow side, like I said, 50 point game. So today was a very important day, as I've been warning you. I've said for weeks now, well, we have to be very careful about the line in the sand. Consecutive days of oil closing above $100 a barrel. Well, day one has happened. We closed at $102.92 a barrel, up $3.41. And again, market, at least on the down side, held up. Remarkable. Just the little engine that could. Now, of course, we turned things back to Friday, and it wasn't quite so amazing, Friday was the day a reaction like the market should have reacted when you had higher oil prices. But we didn't close above $100 a barrel. But on Friday, we lost almost 800 points on the Dow, down 793. But today, we make 50 points on the Dow? This doesn't make sense. But again, we're going to take it. got one more day left in the quarter. Now you're going to see a lot of window dressing going on. You're going to see ⁓ I'd say probably one of the biggest takeaways of today's trading action. Then I'll tell you what I'm going to be speaking about later the program was things too Right. As I indicated on the show on Friday, and if you missed it, please pick up the YouTube or the Spotify. As I mentioned on the show on Friday, we entered into correction territory. some of the major averages, the Dow, the NASDAQ, etc. Russell 2000, meaning we've come down 10 % from our previous high. So we had a lot of negative momentum going into today. But the futures, they were down significantly, like 300 and some odd points last night when I went to bed at nine o'clock. But this morning when I woke at three, they were up a couple hundred points. Again, what happened? This is the risk of this market that we find ourselves in. is no ⁓ logic. I'll be absolutely frank with you. There is no logic to this market. And as I've said so many times over the last few weeks, you got two choices. Either you can bail on this thing ride out this volatility because it's driving everybody nuts, or you can stay in the market, stay diversified, and be ready for when things do settle down. But of course, no one knows when that time period is. You see, we've got a lot of troops, of course, are in or on their way to Iran or that area. And as I'll share with you in just a second, this true social post by the president this morning, I about fell out of my chair as the saying goes. I'm like, you out and said this? This is going to tank the market. Market didn't even respond to Bizarre, just absolutely bizarre. So let me tell you what I'm going to be talking about after I get through the market recap for you. I've titled today's show, The Pros, The Cons, and The Rules of a 401K Loan. You know, lot of you are financially stressed right now. You're stressed, you're stretched. You're like, how am gonna make it from paycheck to paycheck right now? And I'll tell you before I get into the details of today's subject. I am not a big fan unless the situation warrants it, meaning taking money out of your 401K via a loan. but it's there. And what I'm finding is a lot of people don't know the rules because you've never done it. And tell you, most plans, ⁓ it's your HR department or the plan administrator, they don't like to tell you about it. They want you to keep your money in there. Well, you have a legal right to know what your rules are. And again, the pros and the cons of it. And that's exactly what I'm gonna cover for you. Because everybody gets into a financial pinch at some point. And this is just another source that you can go after. Sometimes it makes much more financial sense to take a loan against your 401k than it does to charge up a 23, 25, I don't even know where they are, 27 % credit card loan, know, cash advance, or go to, God forbid, a payday loan company, or even borrowing money from the bank. Many times the interest that you're gonna, by the way, as you'll learn, pay yourself via the 401k withdrawal is cheaper than if you went to a financial institution. And again, you're paying yourself back the interest, but there are some negatives to it. So once again, I'm gonna go through the pros, the cons, really the rules that you need to understand if and when this ever happens. And many of you, what I find, you have the loan, but the rules were never thoroughly explained to you. Or if they were, like so many of us, we get a ⁓ big of documents and you just okay, where do I sign? You don't take the time to read through it, because again, there's a lot to it. So it's going to be a great, great learning experience for all of you. If again, you have a 401k loan, you're thinking about one, or you're like, I'll never do it. Well, you never know. Can't ever say never. But at least you'll go into it knowledgeable and armed with all the information you need to make an informed investment decision if that 401k loan is something in the future for you. OK, so now let's get down to today's market activity. Take you back to the pre-market session. Right before the opening bell, we're up almost 400 points, about 382 at 623 this morning. Great start. NASDAQ futures are up 184. Not long after the opening bell, began to fade within blink of an eye. Literally within the first couple of minutes, we gave up that almost 400 point gain. We're up a couple of hundred. ⁓ Not And then we just kind of oscillated back and forth and back and forth. ⁓ And market, today it feel like it really wanted to sell off. It felt like it had a glimmer of hope. that this situation is gonna be resolved. But slowly but surely, it wasn't a big rapid move, but slowly but surely, oil prices started to move up. And then they just continued to do so. But without the, like I said, the Dow side gave up a lot of its gains, but still managed to finish with a small game. So this is one of those days where I'm going to say, let's count our lucky stars that we got out how we did. So here's how we finished. A 50-point gain on the Dow, as I mentioned. Our close was 45,216. Not quite so fortunate on the NASDAQ side. 154-point loss, down 0.73 % to close at 20,794. And the S &P 500 gave up 25 points or 0.39 % to close at 6,343. Russell 2000, almost 1.5 % loss down 1.46%, about a 36-point give up there. But now let's go to the president's comments that got the day started. Like I said, you never know how this market's going to react to his comments. Sometimes it really gets upset at very, but you know, maybe on the surface, not those harsh of comments. And then you get a day like today where you're like, it's like a two by four across the face. And the market's like, yeah, okay. So this morning, the president said that the US will, quote, completely obliterate Iran's electric generating plants, their oil wells, and Karg Island, if strategically vital Strait of Hormuz is not, quote, immediately reopened and a peace deal is not reached, quote, shortly. went on to say the following. The United States of America is in serious discussions with new and more reasonable regime. to end our military operations in Iran. This is what he said on True Social again. said, great progress has been made, but if for any reason a deal is not shortly reached, which it probably will be, and if the Hormuz Strait is not immediately open for business, we will conclude our lovely stay in Iran by blowing up and completely obliterating all their electric generating plants, oil wells, Karg Island. than in parentheses, and possibly all desalinization plants, point, which we have purposely not yet touched. I don't know how many harsher words could have been written. when you say you're going to obliterate a country and you're going to go after the infrastructure, the power plants, the desalination, all these things I've been talking about, and the market doesn't really budge on that, crazy. He went on to say I want to try to find I it's in a different story. In regards that 15 point plan, he said that Iran has agreed to most of the points, which we still haven't seen. As I said on Friday, we still haven't seen the 15 points and Iran still is saying we don't know he's talking about. We haven't agreed to anything. So once again, who's who's playing cat and mouse here? But we know the president's strategy. comes out, swings a big stick, and then we'll see if he comes through with it. But regardless, no matter whether you like the president, you ⁓ in the war, you don't, so on and so forth, you have to agree with me that those comments made on true social, those would be enough to scare anybody. But it didn't today. One of those bizarre days. All right, we're just getting warmed up on the recap of today's market activity and what a day it was. Let's turn it over to Kristin Snow first. She's in the Right Now Traffic Center. Hello, Kristin. Welcome back to the Jon Sanchez Show on New Stock 780KOH. Once again, we had a modest gain on the Dow with a crazy day of oil gains. 50 point gain on the Dow. NASDAQ again lost 154. The S &P down 25. Oil for the day up $3.41, $102.92 a barrel, breaking above that $100 psychological barrier. Gold prices today, $64.20 gain, $4,557 an ounce. And here was the other thing. Now this was a positive for the market, and that is, of course, Bond yields coming down. 10 basis points on the 10-year at a yield of 4.34%. Again, we're back to the way the market should react, which is nervousness. They buy the bonds, drives the yields down. One thing I want to mention after, again, sharing you the president's comments this morning on True Social. OK, so here are, week number five into this war. The death toll at this point, according to various sources, ⁓ people have been killed so far. Roughly three quarters of them are in Iran. ⁓ than 1,100 people have died in Lebanon. More than a million people have been displaced. ⁓ of people have been killed in Israel and Arab Gulf states. Three United Nations peacekeepers, troops is, they've been killed in Lebanon over the past 24 hours. Now, one thing that happened over the weekend, Iran's weekend strikes. Now, they targeted Middle Eastern aluminum plants. And there's threatening of course to send a fragile market already into a crisis mode. saw aluminum ⁓ move fairly dramatically today and fertilizer so and so forth. There's some very heartbreaking stories that are going on ⁓ the farmers around the especially just right over the Sierras to us, they need fertilizers. And a lot of it comes out of the, ⁓ through the Strait of Hormuz the various countries over there. and they're paying a fortune on top of paying a fortune for and so on and so forth. you know, careful or it's going to be expensive at the grocery store if we're already there. I'm not up the speed that I should on grocery prices, but hearing my wife complain about it. Yeah, I think it's it's already starting here. So the other thing ⁓ that we mention as we ⁓ of. finish up today's activity, trading activity, is Karg Island situation. I know many of you have been reading about this. There's many talks what could happen there that of could be a major significant situation that unfolds as these troops, they get deployed there, many strategists have come out over the weekend saying, essentially what they anticipate would be case would be the US troops would try to take over the shores of Karg Island. Again, it's not a huge island, but it's not far from Iran. the side says, okay, because you're only roughly 20, 22 miles off of Iran, ⁓ obviously well within reach of any missiles, drones, et cetera. that I think could a really, really nasty situation that's building up there that we as investors, of course, need to be very cognizant of ⁓ and human beings need be praying very hard for the safety of our soldiers. Because that one scares me. And I think it scares a lot of you. right, so I think you're up to date now on what happened. Once just bizarre comments coming out of the president today that did not spook the market whatsoever. So it's about I have to say about today's action. Like I said, I think we made it out very, very lucky today. So now let's into our topic of the day, right? Let's do something that has nothing to do with war, which I know would be a nice change for you and a nice change for me. Let's talk about the pros, the cons. ⁓ and the rules of a 401k loan. know, no matter what financial level you find yourself in, maybe you feel you're wealthy, maybe you are wealthy, maybe you're poor, maybe you're middle class, maybe you're anywhere, everybody at some point, it seems like, gets into a financial crunch. What do you typically do? You'll go to your emergency fund, you'll go to your savings account, maybe you'll go to your brokerage account. Maybe they're gonna take out a personal loan, borrow it from mom and dad or grandma and grandpa or some friends or something like that. one source that does not, I think, get a lot of attention is your 401k. So I wanted to spend today going through the pros, the cons, and most importantly, the rules of a 401k loan. they are a different animal. There are very, very specific rules. But where I find that people really have a misunderstanding is... the interest and how it's paid and who pays it and who gets it and so on and so forth. So you're have a really great understanding by the time I'm done with this topic at the end of the show today. So remember there's two ways that we can take money out of a 401k. All right, we can do an actual withdraw, which I'll get into, which again can be very expensive via income tax, via penalties if you're under 59 and a half, et cetera. Or you might consider borrowing from your 401k. So let's kind of start things off with what's a 401k loan. So the 401k loan allows you to borrow money from your employer sponsored 401k plan. Now as a general rule, And I underlined the word general. You can use this money for anything. You can use it for covering medical expenses, paying off debt, whatever the case may be. A of times people take money out of their 401k because the interest is significantly cheaper than their high interest credit cards. The loan, it's gotta be paid back. No, sure, not a surprise to any of you. It's gotta be paid back with interest over time. essentially what you're doing in a 401k loan, is you're borrowing from yourself and paying yourself back with interest. Sounds great, right? Well, there's some catches. I'll share those with you in a minute. So let's start off with how much money you can borrow against yourself via your 401k. So the rule says this. You can borrow up to 50 % of the value of your 401k to a maximum of $50,000. So obviously, if you do the math, if you have $100,000, you can borrow the maximum of $50,000. If you have $200,000, You can still only borrow $50,000. That is your maximum. If you have, I don't know, $20,000 in there, you can only borrow 50 % or $10,000. So that is the major rule there. Unless 50 % of the vested balance is less than $10,000. So remember, vesting means it's your money, 99.999 % of the time. That money you put in your 401k, that is all yours. The money your employer puts in, if you are fortunate enough to get a company match or profit sharing or something along those lines, that usually has a vesting schedule. Now, typically on a company match, again, 99 % of the time, they give you 100 % vesting on that, meaning they put $100 in on last Friday's paycheck, you could borrow against that. But the profit sharing side, usually that has a five-year vesting schedule. So we're going to kind of forget about that because that gets to be real complicated. So let me go over this last rule, because a lot of people don't know this. You can borrow, again, up to 50 % or $50,000 unless 50 % of the vested balance is less than $10,000. If it's less than $10,000, you can borrow the full $10,000. So again, if you're vested $10,000, you can borrow the full $10,000. So a lot of people aren't aware of that rule. Now, since this is a loan and it's not a withdraw, here's some great news for you. There's zero income tax on the money. There's zero 10 % early withdrawal penalty if you're under 59 and a half. And that is provided you continue to pay the loan back appropriately and over right payment amount, the right schedule of time, et cetera. But here's the gotcha of 401k loan. Many people do not realize this. The pro is, yeah, hey, this is great. I get to borrow the money and as I'll go through, it's really a simple process. But what a lot of people don't realize is every dollar that you borrow, again, from yourself, paying interest back to yourself, that is money that is not. that is not working for you in the market. So let's do a hypothetical. Let's say you've got $100,000 in your 401k, you borrow $50,000 of it, okay? That $50,000 that you borrowed, it is not in the market working for you. So you only are gonna have $50,000 working in the market, not the full $100,000. Now why is that? Again, I won't get into the mechanics with you, but essentially your plan custodian is setting aside $50,000 of your mutual funds that are in your ⁓ collateral. So that in the event that you do default, they can sell those off. It's kind of almost like a margin loan in a sense. They can sell off that $50,000 in mutual funds and therefore pay themselves back. Because you're borrowing from your plan custodian. So that's why when you against your ⁓ 401k, that is not working for you ⁓ in the And again, a lot of people don't realize that. ⁓ Wait a minute, here, know, market's up 10 % and only up ⁓ whatever, 5%. What the ⁓ going on? Well, if you got a 401k loan, that's usually the reason. All we'll continue on our discussion of the pros, the cons of borrowing money from your 401k and most importantly, the rules of it. Let's turn it over to Jack Saban. He's got news, traffic, weather. Hello, Jack. Welcome back to the Jon Sanchez Show on New Stock 780K. Happy Monday to all of you. Once again, we finished with a modest gain of 50 on the Dow. The NASDAQ, it fell 154.73 % and the S &P down 25 points, .39%. Big news of the day was oil prices surging $3.41 to 102.92 a barrel, gold up $64.20, 45.57 an ounce, and a big pullback in bond yields down 10 basis points on the 10-year to yield a 4.34%. All right, we're running through the rules, the pros, the cons, and everything you need to know about taking out a 401k loan, right? Find yourself in a pinch. Hey, this is an alternative for you. there's pros and cons to it like in anything else. Let's kind of hit some of the high points that I touched on so far, which again is you can borrow up to 50 % of the value of your ⁓ 401k a maximum of $50,000. Your payback term, this is kind of where I left off, your payback term can be all way out to five years. That's right, you can do a five year payback term and once again you're paying yourself back the interest. Now, what a lot of people wanna know is, well, what's the interest? So this is obviously something you wanna find out before you take out your 401k loan. So what you do is you ask your plan provider, custodian, et cetera, usually your HR doesn't know, you wanna call the plan provider, because that rate will change. again, kind of an average is, it's the prime rate plus. anywhere from 1 to 2%, right? So I'm guessing right now you're probably going to be looking around 8%, 9 % interest somewhere around there. But you always want to check on that and obviously know what it is. Another thing you want to check on is what's your payment? So you're going to be given an option when you take out a 401k loan. And remember, there's no credit checks. There's no nothing. You just fill out the plan provider's package of paperwork. It's usually pretty simple. And submit it. But they're going ask you, how do you want, what term do you want on this? So with a 401k loan by law, you have anywhere from one month all the way out to five years to pay this money back. here's another surprise that people get. They always think, ⁓ I'm paying back this this prime plus a couple points we'll call it, back to But what they don't realize, they're paying it out of their net paycheck, not out of the gross paycheck. Wouldn't that be something if we could do that? So again, the you go is five years. You can set it up for payment amounts as long as it ⁓ the minimum. ⁓ can always pay off any time that you want to with no payment penalty. ⁓ And again, just to break the misconception, there is no taxes, no penalties, no nothing to take a 401k loan. And again, not plan offers this, right? Not every employer offers this. So some of your larger plans, more sophisticated plans, they're going to offer it ⁓ by all means. remember the maximum period of your net paycheck. is five years. lot of plans, by the way, will offer automatic payments, right? So you just have it taken directly out of your paycheck, you getting out of the net numbers through your payroll deduction. Good idea put that on autopilot. Some plans do allow you to send money in whenever you want to, ⁓ but I've a lot of people get themselves in trouble. It's better to set up just with automatic, you know, 25 bucks off my paycheck every single week or whatever your terms turn out to be. Let's see. No tax break, I think is another point I want to mention, no tax break on the payments, right? You can't write off the interest like you can on some types of loans, that type of thing. So now let's get into the pros and then the cons, right? Let's kind of, some of these I've said, some of them I'll add to. So once again, the big pro of a 401k loan is this. You don't pay any taxes, you don't pay any penalties, like the hardship withdrawal, which are taxes, ordinary income, comes with a 10 % early withdrawal penalty. But any interest you pay on the loan goes right back into your 401k account. But one exception is if you default on the loan. If that happens, you are going to pay a penalty and taxes if you're under 59 and a half. Now, what constitutes a default on a 401k loan? Pretty simple. You stop making your payments. Most plans are pretty generous, right? So if you find yourself, you take out the loan, let's say your payment's $500 a month, you get into financial hardship and you can't pay it, most plans will allow you to skip some paychecks of paying it back, that type of thing. They're usually not too severe on that. they are severe is, and this is another, I'll get to the con side of it, but I'll throw it in right now, which is what happens when you leave the company? So ⁓ seen lot of people get themselves in trouble. They take out the maximum. And I should one other point that just came to mind, which is a lot of plans will allow you to have two loans at the same time, okay? Again, you gotta check with your plan provider. But let's say you had two, ⁓ $50,000 loans, right? You're in debt for $100,000 to the plan administrator and essentially yourself. And all of sudden here comes the pink slip, right? You get laid off and you go, oh my God, I owe $100,000. What am I gonna do? So don't panic. lot of plans, especially if you're laid off, will allow you still to make payments to the plan every single, usually it's on a monthly basis if you're not working. Obviously you're not getting a paycheck. So you wanna check on that again before you even take out your loan. If you think there's any chance you're gonna lose your job, make sure you understand that rule. again, not all plans, but some. I'd say the minority will allow you to continue paying if you're no longer employed there. The option that I do a lot of times with clients is nowadays, and is ⁓ relatively new, many 401k plans will allow you to transfer over your loan. So let's say you work for company 123. Right, and you got a 50 or $100,000 loan, whatever it is, and you lose your job. You quit, or again, you get a pink slip, whatever the situation is, you no longer have a job. So you go to work for a company, 9, 10, and 11. Well, that company, you check with them when you're getting the interview and deciding to accept the job offer, you'll ask, will your plan allow the loan carryover? And again, this is hit and miss. I can't give you a percentage. don't. do this a lot, I don't see it a lot, so I don't know what industry norm is there. That's question you want to ask. So when you go to work for that new company, if that's the case, get together again with their plan administrator, if the answer is yes, get together with their plan administrator, ⁓ and have all the paperwork for you to essentially roll over loan from your first company to now your new company. And then you just continue on the payments. Don't be surprised if they say no. A lot of plans, again, will not take over that loan rollover. So what do do? You ask your old company, can I continue making payments? If the answer is absolutely, unequivocably no, well, now you're kind of stuck. So remember, if you default on your 401k loan, it's not gonna hit your credit, that's the bright side. However, if you're under 59 and a half, so you're gonna default, right? So if you're under 59 and a half, you're gonna pay the IRS a 10 % penalty on that loan amount. And then of course, it's gonna be reported as taxable income. So in that example, somebody had $250,000 loans, that is going to show up on your W-2 or your 1099 as income in that year that you default. So that can be a major, major surprise. Obviously that could throw you into some higher tax brackets, et cetera. So be really careful on that. ⁓ And I don't the time today to get into it, but there are some other loan provisions. If you get into, I'll just use the term dire straits where you're about ready to lose your home. ⁓ They do have some provisions that you can different borrowing amounts. Those are under IRS guidelines. same thing if there's medical emergencies, et cetera. So I'm just kind of covering the basics, but always check with your plan provider. Okay, so now back to the Again, you miss your payment. It's not going to impact your credit unlike any other type of loans, even if default. Now, because you're from yourself, again, the application process, very simple, quick, easy. No credit checks, no like that. ⁓ But if you are married, some plans will require that your spouse signs off on it. Sometimes they'll require you to notarize the document, ⁓ they don't want someone to be able to go out and take out a big old loan and the spouse goes, what the heck did you do? You didn't have my approval. So don't be surprised if you're married and they ask your spouse to sign some documents there. So you use the loan for something that improves your financial standing in the long run, yeah, again, a loan could be very beneficial. Back to the example I used at the beginning of the show. ⁓ Say you got a 25 % credit card and you're only paying 10 % to borrow on your that's possibility. Don't always look at it just interest rate to interest rate because once again, you're losing out on that growth of that money in your 401k. it's to that in, but just something you need to be aware of. And since you're borrowing the from yourself, there's no over complicated loan application. They're again, very, very simple. Usually there's gonna get some basic and personal information. ⁓ You submit it online and usually in five days to 10 days, the money will be in your account. Okay, there's enough of the pros. When we come back, let's hit the cons of a 401k loan. First, let's turn it over to Kristen Snow. She's in the Right Now Traffic Center. Hello, my dear. Welcome back to the Jon Sanchez Show and News Talk which we've been talking about the pros, the cons of a 401k and most importantly, the rules. All right, so we went through the pros side of things. Let's get to the cons of a 401k loan. pretty much covered all these, but let's run through them one more time. Not all employer-sponsored allow 401k loans. So again, don't be surprised, especially if you work for small company and they kind of have one of the smaller plans out there, not by one of the big providers. 401k loans may not be available. When you leave your current job, as we discussed, you have to repay your loan fully by the time you exit the door unless the new company is going to, again, take that loan over, which, again, not a lot of them do. So you gotta figure out on that. Default on the loan, again, as I said, you're gonna owe 10 % if you're under 59.5. Everybody's gonna owe taxable income on the amount that you default on. It's not gonna show up in your credit report, though. We touched on how much you can borrow, again, 50 % or 50,000, no matter how much you have in there. Here's another little rule that most don't understand. You are not protected by bankruptcy. So if you file for bankruptcy, you still have to repay your 401k loan or face taxes and early withdrawal penalties. So a lot of people think they can fold that into all their other debt if they file for BK. So here's a little statistic that I thought was kind of interesting. I did some research on this. How common are 401k loans? Well, all we have is data for last year. According to Fidelity, about 19.4 % of survey participants had an outstanding 401k loan at the end of last year. Slight uptick from 18.9 % in 2024. Around 9 % took out a new loan in 2025. Vanguard, however, reports a little bit lower figure. They said 13 % of participants carried an outstanding loan in 2025. And remember this Secure 2.0, remember this a few years ago? Well, changes under Secure 2.0, including the emergency withdrawal provision. which allows participants to take withdrawals of up to $1,000 per year. That's right. So again, can take this out, no penalties, no nothing, up to a ⁓ year. That ⁓ most analysts' they're going to probably bump that number up over time. But that's again, something relatively new. ⁓ I don't think had any clients take advantage of that one. So the bottom line this, it requires like anything that we do. It requires very careful consideration, right? You're taking money out. You're setting yourself up, again, for another liability. You've got five years to pay it back. If you leave the company, there could be problems there. again, the one thing that people don't realize is that money is not working for you in the market. You may go, hey, you know what? I don't care. ⁓ It's working me in the market or not. I need to pay off debts, or ⁓ I need buy something, whatever the case may be. So that's, completely up to your decision. But the most important thing is now you understand the pros, the cons. And again, when this fits into play, because you'll get some financial advisors, I'll tell you, you're not part of our clientele, ⁓ you get some financial advisors that go, absolutely not, that is the stupidest thing in the world for you to ever take out money out of a 401k, because again, it's not working for you in the market. ⁓ Well, easy thing to say, but look somebody straight in the eye that needs the money. ⁓ Maybe got mounting medical bills, or car's ready be repossessed, or the house is getting ready to be foreclosed on, trust me, you're not gonna give a darn about. ⁓ money not working for you in the market. you know, the good thing is from a national standpoint, we are seeing more and more people putting money in 401Ks. There's a lot more millionaires today than ever before as far ⁓ 401K balances. once again, now have another source that ⁓ you can do. ⁓ The last thing the world you want to do is something like those payday loans or some of those crazy out there. I've seen people do that. I'm like, wait a minute, you have X amount of money in 401K. Why are you out there? ⁓ paying 25, hypothetically 25 % a month you can just borrow from yourself and pay 9, 10 % for the year. So a good thing to have. And I think of the final question or thing I'll mention is a lot of people go, well, wait a minute. I call my company and they don't offer the ⁓ 401k loan. is that? So when your sets up the 401k, that's called the documents. asked if they want to allow it. Why companies wouldn't allow it for their employees? I don't know because literally it's as simple as when you do the payroll, you set it up and say, you know, $50 payment to the 401k loan. It's a really simple process. So if your company doesn't offer it, tell them they, you know, it's pretty simple for them to include it in there. They can go back and modify their plan documents. And then they have that, again, it's a nice little benefit for people because people get into... financial minds every once in a while. So it's nice to be able to help them out as an employer. All right, you're now up to date on the pros, the cons, and the rules of the 401k loan. If you have any questions, by all means, always reach out to me. If not, I will see you tomorrow on the Jon Sanchez Show. God bless, have a great afternoon.