Max Out On Your 401 - k - retirement savings plans

Kiplinger's Personal Finance Magazine, May, 1999 by Mary Beth Franklin

Another potential problem: If you quit your job or are laid off or fired, your loan may be due immediately--at a time when you may least be able to afford to pay it back. If you can't pay it back, the outstanding balance will be considered a taxable distribution and, if you are under 55, you will get hit with a 10% early-withdrawal penalty as well.

Plan loans generally must be repaid within five years. But if you use the money to buy a home, you can stretch out repayment over a longer period. If you use a plan loan to buy a house, ask whether you can secure the loan with your house. That way the interest would be tax-deductible.

Kiplinger.com: Join Mary Beth Franklin on Wednesday, April 21, at 5 P.M. ET, for an online chat about how to make the most of your 401(k). Plus: Use our 401(k) calculator to see how your contributions will grow.