401K Plan Restrictions
A 401k plan also has restrictions on how the money can be used and what it can be used for. Normally, you are prohibited from making withdrawals from the plan until you reach age 59 1/2 except in the case of special circumstances. Many employers do, however, have rules in place that allow you to borrow from the plan with additional rules indicating how it is to be repaid. In recent years, because of financial difficulties, many families have found themselves dipping into their 401k plans to make ends meet. This, however, should always be a last choice of funds because when you borrow against your 401k, you are putting your future retirement plans in jeopardy.
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