Can: Take Out A Loan

Even though you should never drain your retirement savings except in cases of an extreme emergency, most plans DO allow you to take out loans. If permitted, you can borrow the lesser of 50% of your vested account value or $50,000.

Loans are generally paid back over a three to five-year period, and you pay the interest on the loan back to your own account. This isn’t generally an advisable strategy.

It’s good to know that this loan option is permitted according to the IRS regulations if you’re in a tough situation. Unfortunately, not all employers allow them.