Jeff Rose of US News offers up this great synopsis of the risks of borrowing from your retirement account. He summarizes these key points:
- Lost earning opportunities.
- Many people also stop their retirement account contributions when they borrow from their retirement account.
- Without compound interest working on your behalf during the time that you have removed money from your retirement account, you could fail to accumulate a significant egg.
He follows with tips on managing the risks of borrowing if you truly have no other choice:
- Borrow as little as possible
- Repay yourself as quickly as you can
- Keep making contributions
Full text of the article available on US News. Bottom line: think before you borrow money from your future self. Your future self will thank you!