financing school 401k

I have never done it, but I don't think it is a good idea. If you take from your 401K, what will you have left when you retire? There are also pentalties for taking from a 401K early. Apply for student loans. The interest rates are reasonable and you won't have to start paying back until you are out of school. If you haven't done it yet, will out the FAFSA. That is the first step in appying for loans.

http://www.fafsa.ed.gov/

good luck!

A lender shouldn't count your 401K against you because you get penalized for taking it out. It's designed for retirement, that is why you get to invest the money pre-tax. 401K's are usually treated as an asset, not savings.

I wouldn't take out your 401K to pay for school, if you can get a loan at a decent rate.

Tapping into your retirement account is a very bad idea. Go for government loans. There is really no good reason to use your retirement account for anything other than your retirement unless you REALLY like working and never want to retire :)

Not a good idea. Better to borrow or exhaust all other ways first.

Has anyone ever taken money from a 401K to finance school? Is this a bad idea? A couple of years ago I had to take out 2k for paying bills cause I was broke. What do you think? I have never applied for a student loan before. I'm not working right now so money is tight. Will a lender count my 401k against me for getting a loan?

for nursing school, no. for law school, maybe.

comparing a nurse's salary to a lawyer's, it would take you years to regain a decent retirement savings as a nurse compared to being a lawyer.

and as you age, this job gets harder and harder.

You can work your way through school. You can take loans for school.

You can't work your way through retirement and you can't take loans to finance retirement.

You might be able to take a loan from your 401k for education expenses. Call your plan's administrator and explain that you want a loan, not to close it out. Then you can pay yourself back, with interest, and you dont get any of the penalties. I would try getting student loans first though.

I took a load against my 401k once, and it was fine. You pay yourself back the interest, and you do it right out of your paycheck. You definitely get it paid back. Plus, it does not affect your credit. Don't liquidate your 401k, but considering a loan is fine.

it depends if you take a loan against it and pay yourself the interest such as Cardiac RN describes, If you have to take an outright withdrawal then you should check to see if there is penality. I thought that if you withdrawing for education there was no penalty but I could be wrong. Also remember you will be taxed on this amount like it was income so it may put you in a higher tax bracket and you will take a hit on that.

A general rule is that if you are able to take out a loan that is at an interest rate less than that of what you are making on your investment 401K then take the loan out. If the interest on the loan is higher than your 401K return then take the $ out of the 401K.