Should I Take a 401(k) Loan or a Withdrawal?

The extended job loss due to COVID-19 has left people scrambling to figure out how they're going to make ends meet until life returns to normal. The federal government has offered assistance in the form of stimulus checks and expanded unemployment, but that's not enough for everyone to cover their expenses. So some of those in need are turning toward their retirement savings.

The CARES Act has loosened restrictions on 401(k) loans and withdrawals, but you should still use these as a last resort. Taking money out of your retirement account, whether temporarily or permanently, can set you back and make saving enough for retirement an even bigger challenge. But if you've exhausted all your other options, using your 401(k) funds may be smarter than taking on debt. Here's what you need to know about 401(k) loans and withdrawals under the CARES Act to decide which is right for you.

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