401(k) plan and benefit

Over the years I have been asked that is the 401(k) loan be a good option for essential money supply. My co worker also say that it is a good option.It is also true that money is essential and some 401 (k) loan is taken to pay off high interest bearing credit card debt. And then you have to pay the interest back to the 401(k) account.

And i can tell you that if you want to take a 401(k) loan then you need to consider the following:

Firstly, you may be paying interest rightly but make sure that your money is not invested in the stock market. It is also true that during last decade the stock market has increased in value. If you have investment in the stock market and are receiving healthy return you will definitely try to invest more in stock market but 401(k) loan is a kind of piggy bank after your retirement.

Secondly, it will reduce your take back home. Suppose you have a huge credit card debt and you have taken a 401(k) account loan. You have paid the credit card debt but at the end of the month you will take back home less amount than your expectations. So before taking the loan you must think of the amount you will take back at the end of the month.

Thirdly, you should plan your retirement in a better way. Today you do not know how much money you need to save for future but if you can plan your retirement in a financially sound way.

Fourthly, the best time to contribute to your 401(k) is, when the market is up. If the shares are available at discount in the market you must buy more shares because the market is down.

Let's discuss some benefits of 401(k) loan.

401(k) plan is a popular retirement plan in United states. This plan is initiated by the employers of united states in order to safeguard the financial benefit of the employees at retirement. The benefits of 401(k) plan are

This plan is implemented at the time of recruitment and it provides benefit throughout the service life of the employees.

This plan helps encourages the emplyees to contribute to the company's benefit in a better way.

This is a less expensive way to retain the employees in the company.