A loan from your retirement account

May cost more than you think

Hidden costs of borrowing from your retirement account

No tax advantages

Interest on your loan isn’t tax-deductible, and loan interest payments would be made with money that has already been taxed.

You may have less money for your future

Contributing less while you repay your loan could have a big impact on your long-term balance.

You’ll miss out on the potential of compounding

The less money you have in your account, the less you have to build upon, and the more likely you are to have less in retirement.

1 FOR ILLUSTRATIVE PURPOSES ONLY. Assumes an annual salary of $40,000 with a contribution rate of 6%. Assumes a loan of $5,000 amortized over 60 months at a 3.25% interest rate. Assumes contributions and loan payments are invested and grow at a 7% annual rate compounded monthly over 20 years. Contributions stop when the loan is taken, and then restart after loan repayment period.

2 FOR ILLUSTRATIVE PURPOSES ONLY. This hypothetical illustration is not intended as a projection or prediction of future investment results, nor is it intended as financial planning or investment advice. It assumes a 6% annual rate of return and reinvestment of earnings with no withdrawals over 25 years. Rates of return may vary. The illustration does not reflect any associated charges, expenses or fees. The tax-deferred accumulation shown would be reduced if these fees were deducted. Assumes an account balance of $50,000 and an annual salary of $50,000, with a contribution rate of 5%. Assumes a loan of $5,000 amortized over 60 months at a 4% interest rate.