EMERGENCY MONEY DISCUSSION, PT 2:

Borrowing money from a 401k is a horrible idea when the stock market is down. I get it if it's a real emergency but it's throwing money away.

 

From what I understand, if you are laid off as a result of the economic impact of the virus you are now allowed to borrow up to $100k from a 401k with no taxes or penalty provided you pay it back within 3 years. If you end up not paying it back, you will pay income taxes on that money but no 10% penalty as typically applies to early 401k withdrawals.

The risk to the actual value of the investments in the account is if the market goes up from where it is when you pull money out. In that case, you've locked in your losses ("selling low"). On the other hand, if you take out a loan against it and the market falls from where it is, you've protected that money from further losses and your repayments could theoretically be going back in when the market is depressed ("buying low") and experience more growth as it recovers. Of course, nobody knows where the market is going to go at any given time and that's the least of their worries if they need to use this option.

One risk to consider concerns bankruptcy. The money in your 401k is protected from seizure in the event of filing for bankruptcy, but almost everything else is fair game and can be taken from you. Leaving your 401k alone protects it no matter how much is in there or how bad a bankruptcy is.

It should be considered an option of last resort, but it's an option.

 

Ive not seen a slow down. But then again im doing hazmat loads for minimum wage. Not paid for all hours worked etc. The pay per hour is a misrepresentation. i dont want to embarass my ltl company i wont mention their name.

 

You don’t have to mention your company but do you pull yellow trailers by any chance?

 

No

 

Recycling companies are extremely busy and all need help. If your brave enough most grocery stores are hiring people to deliver groceries.

 

I'm busy running regional OTR. My company got 23 drivers to take volunteer layoff. Not sure why because I got more work then I can to. I would not mind slowing down a little but I have guaranteed minimum pay. So maybe that why they keep me running.

 

Well company put up list to sign to volunteer to take weeks off.

 

they took it cuz they get an extra $600 a WEEK unemployment w/ the CARES Act.