Has anyone borrowed against their 401(k) — The Bump
Infertility

Has anyone borrowed against their 401(k)

to pay for IVF?  My husband is thinking about borrowing or cashing out his 401(k) to pay for IVF with DE.

Sorry I've been MIA.  Work has been super busy but I want to tell you all about my visit with inlaws this past weekend.  It was very unnerving.

We visited his folks on Sunday and the visit was going well until she kept digging for info when there was absolutely no update.  She knows we're saving up for the procedure so it's not like it was news to her but she started in on about giving us financial help mostly because she wants a grandchild right now.  They wouldn't be involved if we had a baby the traditional way, why would we want them to buy us genetic material so I can become pregnant? 

His mother's mentality is so uncaring.  All she does is talk about how much she wants a grandchild and the fact is we're getting too old so we have to hurry our decision based on that she may die soon.  She's not nurturing at all.

This is the best but she questioned if I had known about my fertility issues before we got married.  I made a comment about my eye condition being hereditary and that's when she brought that I knew I couldn't have kids then.  I corrected her and told her I wasn't diagnosed till 2 years ago with POF so I had no way knowing I couldn't have kids.

image
DX: Premature ovarian failure
::::SAIFW::::: People call me a feminist whenever I express sentiments that differentiate me from a doormat or a prostitute. - Rebecca West
WE'VE BEEN MATCHED WITH A SWEET LITTLE BOY!! -4/5/11

Re: Has anyone borrowed against their 401(k)

  • I can't believe she asked you that! What a witch! I'm so sorry :(

    I don't have any info about the 401(k) but I wanted to tell you that I've missed you around here! I think of you often sweetie.

    TTC #1 since June 2008 *SAIFW*

    TI, IUIs, IVF = c/ps and BFNs

  • I'm so sorry you are facing this decision and that your MIL was being so insensitive!! Like you don't think those things without her pressuring you about it. So not nice.

    As far as the 401(k) cash out/loan goes, I thought I'd remind you to speak to a tax advisor about it before the transaction because you want to make sure you plan for it with your taxes (sorry, I can't help myself- financial professional). I hope it doesn't have to come to that, sometimes you have to do what you have to do. ((hugs))

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  • I am firmly against borrowing against your 401(K). Aren't there penalties and stuff? I want a baby just as much as the next person, but you could be risking your future. I would just continue to save money.
  • We haven't borrowed for IVF but we've taken loans for other things and it's never been a problem.  You pay yourself back with interest and the only way you would have tax implications is if you defaulted on the loan.  This would happen primarily because you left your job and the payments were no longer deducted from your pay. 

    Now....keep in mind that the money you borrow is out of the market so if there are extreme gains during that time you will lose out.  But if you aren't planning to retire in the near future, you can make up those gains over time by increasing your payroll deferral percentage.

    I work for a 401(k) provider.  Let me know if you have other questions.

     

    TTC since 09/08
    BFP 4/20/09 M/C 5/8/09 EDD 12/24/09
    HSG 8/24/09 - All Clear!
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    Follistim, Clomid, Ovidrel and IUI = BFN....Shocking.
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  • Thanks Madelyn!  I've lurked around but just haven't had time to post.  Not sure why I'm so busy.

    His mother is biggest drama queen I've encountered.  She's beyond selfish and I'm surprised I haven't told her off yet.  How dare she question if I had known about my fertility issues.  What type of woman does that?  Whenever she offers financial help, she always manages to bring up and holds it above our heads.  It's help with strings attached and you just never know when it'll come up again and if we let her help us with this procedure and somehow she brings it up again, Peter has stated he will never ever forgive her and will stop talking to her as a result.  We have never asked for help and we get this type of treatment.  Least to say the visit ended terribly and we feel as if we're the bad guys.

    image
    DX: Premature ovarian failure
    ::::SAIFW::::: People call me a feminist whenever I express sentiments that differentiate me from a doormat or a prostitute. - Rebecca West
    WE'VE BEEN MATCHED WITH A SWEET LITTLE BOY!! -4/5/11
  • imagemomagain2009:

     You pay yourself back with interest and the only way you would have tax implications is if you defaulted on the loan.  This would happen primarily because you left your job and the payments were no longer deducted.

    This!

    I took $7K out a few years ago to pay for IVF (wasn't enough but it helped).  Ask your 401K provider about details.

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  • Just a warning about borrowing from your 401(k) - if unfortunately you are laid off from your job, the balance is due on the loan immediately or you are stuck paying taxes and penalties on it.

    If you have one, a Roth IRA could be a good source of money - I think you are able to withdraw the principal balance without any penalties or taxes. 

    Married 08.06
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  • He has a 401(k) from a company he no longer works for.  He will contact Fidelity and see what his options are. 

    Thank you all so much for your advice, so appreciated!

    image
    DX: Premature ovarian failure
    ::::SAIFW::::: People call me a feminist whenever I express sentiments that differentiate me from a doormat or a prostitute. - Rebecca West
    WE'VE BEEN MATCHED WITH A SWEET LITTLE BOY!! -4/5/11
  • imagesweetky_06:

    Just a warning about borrowing from your 401(k) - if unfortunately you are laid off from your job, the balance is due on the loan immediately or you are stuck paying taxes and penalties on it.

    If you have one, a Roth IRA could be a good source of money - I think you are able to withdraw the principal balance without any penalties or taxes. 

    Not necessarily true.  I had a loan with a previous employer on my 401(k) through Fidelity.  I left that employer for a new job.  My 401(k) is still at Fidelity and now I make direct deposit payments each month.  It is continuing except of paying biweekly out of my paycheck, I pay monthly from my checking account.

    Definitely check with your benefits provider.  A 401(k) loan is better than taking a distribution.  And you are paying yourself the interest on the loan.  So even though you are out of the market, you are still paying yourself 4-8% (depends on the rate of your loan).  Just make sure you pay it back!

    And I would compare the rate on the 401(k) loan to that available from IVF financing groups.

    Good luck!

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