Monitor Your 401k Loans

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Today I wanted to talk a little about 401k or 403b loans.

I find that there is sometime a lot of uncertainty about these.

But first, the real question is, how can you as a company that sponsors a 401k or 403b plan, turn your plan from a liability into an asset that gives you an unfair advantage in the marketplace, and helps you become a 401k superhero to your employees?

That is the question, and these videos will give you the answers. I’m Jonathon Schultheiss and welcome to the Ultimate 401k Advantage videos.

In the 5 step process I teach in my book, Step one is Analyze. I talk about analyzing the number of 401k loans your plan has and how much that number is growing.

That’s important for a couple of different reasons. Let me tell you why. It will help you know if you have participants that are abusing the loan feature of your plan.

This past week we discovered a participant who took a larger loan and only amortized it over a 12 month period. This made her payments take up a large portion of her paycheck.

Here’s what most participants don’t know about plan loans. Once you accept the terms, you can not change them. She couldn’t change the terms of the loan to spread it out and lower the payments. She was pretty much stuck with the payments for the next year.

Step 5 of the 5 step process is educating your employees. This story lead us to doing some additional education around 401k loans to insure other participants don’t make this same mistake.

You see, helping your employees avoid potential issues such as this by implementing the 5 Step process from my book is a great way to help you become a 401k superhero to you employees.

Want to learn more about my book, The Ultimate 401k Advantage, the 5 step process to become a 401k superhero to you employees? Click the link above and get your free copy today.