Iron Mike, Took your advice and looked up "double taxation"  I think I understand. Takes me a while but I think I get it. Example. You take out a $10,000 401 loan and put it under your mattress for 5 years. You repay the loan for the next 5 years. You have to pay taxes on the repayment of that loan and then will...more

Iron Mike, You are comparing oranges to apples. The money you take as a bank loan is not money you are trying to save in a 401k account and only pay taxes on when withdrawn. 401k was meant to be a saving platform that allows you to save money tax free until withdrawn.  The subject of this discussion and this arti...more

Iron Mike, What's up. I wasn't going to reply because I don't think we are on the same page. But, not replying just isn't in my nature.  I agree with you. Loan repayment should not be pretax. There should not be a loop hole. But that wasn't my original argument.  My original point was that the article "Assumption 2"...more

Iron Mike, You are missing the point. The loan repayment IS NOT pretax. The paragraph above entitled "Double Taxation"  tells you as much. You pay taxes when you repay the loan then again when you retire and withdraw.  Again, the loan repayment is not pretax.

Iron mike 76,  That's exactly my point. I don't know what type of 401k loan you have had, but, the three loans I have had have all been repaid with taxed dollars. Actually, the above paragraph, "Double Taxation" states just that. Here it is.     "This is because the loan repayments, including the interest, will b...more

Unless I am reading this wrong, this article is incorrect. The paragraph on "Double Taxation" say's   "the loan repayments, including the interest, will be repaid with amounts that have already been taxed and will be taxed when withdrawn from the retirement account." Then , in "assumption No. 2, it says that the $108...more