Is this a margin loan?

If yes, do you understand how Margin calls work?

I'm not sure what a margin loan is. The way it was explained to me, I could borrow my own money, repay w/interest, which I get to keep.

Are you talking about a 401k loan, a loan/line of credit via your taxable investment account, or something else like a loan against your life insurance?

I withhold 40% of my salary. Of this 25% of my contributions are pre-taxed regular contributions into my 401K, and 15% are post-tax Roth contributions.

What savings? Just cash? Then you’re just paying interest for no reason.

Or is this “savings” some sort of asset?

There is enough $ to take out my $30 from either bucket.

My money is invested in a pre-tax 401k, and also post-tax Roth IRA. There is enough money to draw from either bucket. I'm hesitant to sell because I've lost about 20-30% with the recent stock market fall.

Can you stop contributing to your investments and pile up cash? The you won't have to sell or sell as much.

You can't borrow against an IRA and borrowing against 401k can be quite expensive in the long run since your money is out of the market.

I'd look into helocs

Yes, that is an option, but I'm thinking it would bump up my taxes.

The way it was explained to me, I won't have to sell. They would just lend me my own money, and I would pay it back (with interest that would also go back to me.) I'm wondering if that is wiser than selling when everything is so low right now.

A heloc is an option, but there would be points and interest at probably 8% or more. Also, I've worked so hard to pay off the house and psychologically I don't want to borrow against it. I could just pull the $30k out and gradually pay it back with my monthly contributions, but not sure if it is wiser to do that, or to go with what Transamerica is offering (borrowing my own money, can default, since it's my own money, and any interest comes back to me.)

1. If you default you'll be subject to income taxes and a 10% penalty, which is way more than 8% interest.

If you have no mortgage, you should be able to find a heloc at prime minus, unless your credit is poor

At my current contribution, I would pay back the $30k in about 15 months.

By how much? I would find a way not to sell or borrow money. If you borrow against yourself and the market goes down, you could faced with a margin call.

So, I'm thinking I'll just pull out the $30K, which wouldn't trigger a tax event, since the value has dropped so low, and just continue my bi-monthly contributions...

My credit is excellent. What about the points and charges in borrowing 30K? Is it wiser to take out the HELOC or just pull the $$ out and re-invest/replenish that amount over the next 15 months? The Transamerica guy make the "loan from myself" sound pretty decent because he said all the interest goes back to my account.

> What about the points and charges in borrowing 30K?

Most helocs don't have points or any sort of closing costs (at least any that ive seen).

>Is it wiser to take out the HELOC or just pull the $$ out and re-invest/replenish that amount over the next 15 months?

Heloc, especially if you have excellent credit. May just need a better lender.

> The Transamerica guy make the "loan from myself" sound pretty decent because he said all the interest goes back to my account.

Sure but he also left out the part where if the market turns around, you miss out on all those gains

You did not answer my question. However, I'll assume you mean a 401k loan. When you borrow from your 401k, the investments are sold immediately. Is this what you want to happen?

Where else do you have investments that you can borrow or liquidate?

401k loans are a bad idea. Your money is taken out of the market when you have a loan against it. If you lose your job (leave, get laid off, etc) your loan becomes immediately do. If you can't pay your loan, your funds are sold and you pay penalties and taxes.

Find another source of funds - or save money separately from your 401k for the improvements you are looking to do.

Do you need to do the improvements now? Sounds like you can’t afford them if you have to pull from retirement.

I’m still working and make good money, snd have a lot in savings so that’s not the issue. I’m just hesitant to pull the money out of savings now because of the loss due to the market. I’m not sure if it would be wiser to do a HELOC and allow the market to come back up before paying it back.

No, I wouldn't want that. The Transamerica person said it my money would be frozen, but I guess I'll have to call and clarify.