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401k Loans and Life Insurance

Article ID: 301
Last updated: 25 Nov, 2018
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By Jason Watson ()
Posted November 23, 2018

401k plans may have loan provisions. This means you can borrow up to 50% of the account balance with a hard ceiling of $50,000 (or 50% of $100,000+). You are basically paying yourself interest on the loan.

401k plans can also buy life insurance, which is a neat way of deducting your life insurance premiums since the money going into the 401k plan may be pre-tax. There are all sorts of rules and limitations, but you should be aware of this option.

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Rolling Old 401k Plans or IRAs into Your Small Business 401k Plan       Turbo Charged 401k Plans