Do you need loan insurance if you're borrowing from your own retirement fund?
Tyler, TX — Should you insure a loan from your 401(k) plan? It sounds like a needless expense. After all, when you borrow from your 401(k) you are borrowing from yourself. Yet the big-wigs on Wall Street are beginning to conclude that you may need to take out an insurance policy against a 401(k), in order for some people be saved from their own financial suicide.
Policymakers have long been concerned with borrowing from your 401(k) that money leaves the plans and is never replaced. This happens through hardship withdrawals and when workers shift employers and cash-out a portion of their account before rolling proceeds into an IRA or their new employer’s plan.
Tyler’s very own Jay Oliver, financial advisor —Rose Point Capital Advisors said “"You would need to know the cost involved in the insurance so that you can assess whether you think it's of value to have that extra protection or not"
So when it comes to tapping into your retirement or any savings, be sure to do your research first—weigh and balance all the pro’s and con’s and look at all your options before you reach into your own pocket and tap into your hard-earned cash.