Great vid, as always! To shed some light on rolling a Trad IRA into a current employer's 401k, YES, I am actually doing this right now so as to have a $0 balance in all Trad IRAs so that I can continue to do backdoor ROTH conversions annually. In my case, I verified with my current 401k provider (Fidelity) that they accept Trad IRA rollovers. So, I'm rolling my Vanguard Trad IRA into the Fidelity 401k, which clears the path for backdoor ROTH since I'll now have $0 Trad IRA balances. Pro Tip: you MUST have a $0 balance in ALL of your Trad IRA accounts (no matter how many you have, or who they are with) by December 31 of the year you did the ROTH backdoor conversion, otherwise you'll still trigger Pro-Rata. Hope this helps!
worse advice I ever heard on UA-cam was someone telling people to stay away from investing in a 401(k) ... the video was horrific to watch ... if your goal was to lose all your money then go watch that video ... however if you want to do well with your 401(k) watch this video ... once again Jarrad, great video. Keep 'em coming.
@@cur244is your match also in Roth or Trad? I never knew for 6 years that I could just put 5% in Roth and it'll still be matched but exclusively into traditional
@@ffnovice7 Oh gotcha yeah you're right employer puts in traditional. Either way I'm saying I just maxed it all out and then every raise after that is legitimately a raise.
My company had a 5 year vested plan. Year 4-5 was rough lol. Right after my year 5 there were some changes and now it is a 3 year plan and I was like.... Oi. Probably wouldn't have pushed through that rough patch.
Before I retired last summer, I had plans to roll my lump sum pension into my 401k instead of an IRA to mitigate the pro rata rule impact. Unfortunately, this was prohibited by the 401k administrator because it was not in the contract with my company. So I rolled the lump sum pension into a traditional IRA which caused me to pay taxes on the back door Roth transaction. No big deal. The back door Roth and the mega back door Roth are worth doing regardless of the pro rata rule.
Gets tricky when the choices in your 401k aren't as clear cut, or you have to make the least bad choice, ex. my 401k has some consistently better performing funds, that charge over .25 in fees, while others have lower fees, but tend to under perform, and there's no campaign that's going to change that.
My HSA pay flex has that: highest performance has been SEEGX at around .30% expense ratio vs VFIAX at around .015% which has lower overall fund performance
Great useful information. Thank you for creating a video, sir. I do have one question for you tho. In what order should you max out your HSA, Roth 401K, and Roth IRA? For example, my employer does offer a Roth 401K and HSA program. So I usually max out my HSA and Roth 401K first, after that if I have some money left over I contribute to my Roth IRA. Any advice would be greatly appreciated.
Hello I watched your Roth IRA video. Like & learn a lot. I’m about to open Roth IRA with Robin Hood. I like s&p 500 index, ETF and international stock index. I couldn’t find it in Robin Hood. What do you recommend at Robin Hood? Thank you
Deciding on Roth contribution vs traditional 401(k) contribution is largely a function of your current tax bracket. Do you know your current federal tax bracket and with your job do you expect to jump 1 or 2 brackets in future?
You brought up 401k fees and I’m slightly confused by it. Help me out here. While yes I agree you want to go as low as possible….don’t you have to take the funds return into exception? For example in my 401k I do have an option to invest in a S&P fund at a low .05 expense ratio. But the historical return average since inception is 13.08. There is a growth fund that has a historical return average since inception of 17.60 but the expense ratio is .52 Are you telling me I’m still better off with doing the fund with the lowest expense ratio?
You absolutely need to pay attention to what options are available in your employers 401K. Previous job had 25 target date olans that all had lost 15-27% over the past 10 years, and one that averaged 3% over the past 10 years. The cash sweep acct paid 4.2% so i left it all there. I really wish all employers gave full self direct options.
I have two coworkers in their early and late 60s and never contributed to the 401k. As far as i know they don't have debt and earn more than me. I think their income should be good enough for their spending. Don't understand why they don't like free money. They complain every year about the raise just a few % but never want to contribute to 401k to get the company match 😂 They also don't invest. I guess they just put the money in regular saving account
Appreciate it! She's great. Still getting in at least 5 mile hikes (off leash) in the woods every morning, has an endless amount of squirrels, chipmunks, birds, etc to chase in my backyard the rest of the day, and tags along whenever I go anywhere that allows dogs around. She's living a better life than 99% of dogs out there and doesn't even know it 😂. Thanks for asking
AWESOME video!! So glad to hear you call out the HSA right after you do the 401k match! IMHO, the government needs to eliminate all options to touch your 401k early without penalty. It should be untouchable until you're 59.5.
I was about to disagree with laissez-faire governance, but you might be right because outside of crime, the only reason to withdraw from retirement accounts are usually suboptimal, like for a home or medical or anything that's not life threaten... Well maybe a medical procedure may not be approved in America and you might really need that 10k... Whatever, we just need to play the game harder
He finally gets to the ONE extremely valuable reason to have a 401K. The employer match. And yes those matches are free money, and you DO need to know your vesting schedule. Now I dont think a vesting schedule is the sole reason to stay or leave a company, but it might be something to consider. (seems like he didnt know his. So I got to ask. If you dont even know your vesting schedule, what makes you qualified to tell people to keep their money in a 401K. I know what makes me. (I made a LOT of money investing smartly). And I suspect there is at least one thing we do agree on. That is the importance to make regular, contributions to your retirement account., (And it is so much worse than not to, over keeping your investment in a 401K, where the mistake has significant ramifications, but not catastrophic
DCA is a good baseline strategy but I'm leaning harder into LSI and have maxed my HSA and IRA already. Maybe I'll eat crow by May but I'm banking on the overall 📈 trend
@@amuseinthecraftroom6257 I will assume you are correct on the ERISA thing. BUT if you had $200,000 in the 401K. You are paying likely $1000 a year for that "potential" issue. But hey, it IS your money. You can do what you want. If you want to spend that kind of money you are welcome to do so
I'm sure you've heard from others already, but that 2% blows, I'm sorry. I'm as middle man govt as it gets and I'm getting 5. Not saying you must leave that job, but I would start planning a better career pretty soon. Edit append: so to answer, just put up to the match (see if Roth is matched), then Max out in increasing order HSA 4150 < IRA 7000 < 401(k) 23000. I prefer Roth as I'm barely in the 22% bracket and there's more guarantees with paying tax now instead of looming taxes when I'm senile. After 7 years, I'm finally comfortable enough to try maxxing out my 401; I'm putting more than 4k a month into my r401 to try and hit a bit under the limit by June; the rest of the year is 5 percent of my paycheck to hit close to 22,999$ in order to not waste my taxed money
@JarradMorrow , I believe fund fees. It is quarterly. When I checked the fees from last year it was only $8. Is their something I am missing? That dollar amount is really low.
Sounds like the $8 might be the account fee. The fees you're paying for the funds you invest in are paid from the assets held in the fund (a combination of yours+everyone else that invests in that fund). Because of that the fund fee (dollar amount you pay) isn't going to show up as a line item in your 401k like the account fee will. This is one of the reasons a high fee fund doesn't seem like a lot on the surface. We just see the % which isn't as easy to conceptualize compared to if they showed us how much we were paying in a dollar amount. It's why some people don't think a 1% fee sounds like a lot because "1" is such a small number. When you show how much that equates to in dollar terms it's mind blowingly high.
The mutual fund you're invested in levies a front load of 2.5% ( A shares class) and 1% expense ratio? What's the 5 letter ticker symbol? What are your other investment options?
I might owe you an apology. I was pretty rough on you on your "don't transfer your 401K balance to an IRA". (which I still think is very bad advice.). But I have watched a few other of your videos. And those DO provide useful and good advice. So if I was too rough, consider this an apology. Only thing.... Did you take my comment down? Or was that YT?
You must have my video confused with someone else's because I never said or implied that someone shouldn't transfer their 401k into an IRA. I just re-watched that part of the video 3 times and what you think I said vs. what I actually said are not the same. All I did was lay out the options people should consider when thinking about what to do with their "old 401k". The reason I didn't give a clear cut answer is because there are a lot of things to consider. You might want to go re-watch at 01:20 to see for yourself. I didn't take any comment down. UA-cam is very good (better than you think) at understanding the tone of a comment to know whether or not they should flag it for review by the creator. I very rarely check the flagged comments because YT is correct to flag a comment 90% of the time. They don't flag comments that are generally critical of the content, but when the tone becomes extremely hateful, they can detect it, which is why it gets flagged for review. There are times when I'm wrong, so I encourage constructive criticism if it's warranted. I'll check the flagged comments for you right now to see if YT held it for review.
Uhhh yea so I just saw your comments that YT flagged. Holy shit...do you talk to/treat people like that in real life? Like I said, I'm all for constructive criticism that's based on fact, but all of your nasty comments are based on something I literally never said in the video. I appreciate the apology, but wow.
@@JarradMorrow First, I dont thing I wrote anything that disrespectful. (I checked). Second I did apologize for being somewhat rough. Most of my comment was explaining how 401Ks charge fees that IRAs do not. Perhaps something is getting screwed up in the algo. (I did make fun of your comment that IRAs have managed funds while 401Ks may not. But that one did not make any sense to me. Anyway, if you are advocating that people your age invest regularly, and frequently 401ks provide employer matches, you have no quarlel with me. (Am a little curious what you found so offensive, but I am also willing to just leave it at this.)
I think IRA is better than 401k, because it keeps your employment separated from your retirement. It also gives you focus and many more choices among etf and mutual funds. 7000 per year as of 2024 is more than most people contribute to 401k anyway. As for employer match, it is not something you can’t retire without, it can be revoked during lay off. They give it only to keep you stay at one place.
@@alex182618 Some 401(k) plans have a "vesting" schedule wherein the company match doesn't become 100% yours until you've worked there for set number of years say 1-4 years. With some 401(k) plans the company match is yours immediately.
You could end up with many smaller 401ks if you change employers a few times which makes management more of a challenge than a rollover IRA, plus you have more investment options in a rollover… also, I had a 401k with a former employer and when they changed providers (from Prudential to Fidelity) my account was automatically moved too… I didn’t see any benefit to not rolling over… a quick search now says a rollover is federally protected, can you provide your source that says otherwise? That surprises me a little…
Great information. Not everyone can max their Trad/Roth IRA before their 401K. It depends on their MAGI (Modified Adjust Gross Income). So, some people's max is $0. I like using 401K to the max because it reduced my taxes.
You should be able to do it more than once per year. The process of going about it can differ from provider to provider but they shouldn't have a limit on this.
That's not a good idea: 1. If you leave a company or are terminated you have 30 days to repay the entire balance or the IRS considers it to be a non qualified withdrawal so you'll have to pay the full tax and penalty on the amount. 2. In some plans you cannot invest in the 401k while you have a 401k loan. REVIEW the 401K terms or discuss with the plan administrator and your tax accountant. 3. It is not a Tax free loan. In most plans the 401k loan repayment is made with after tax dollars so you're losing the tax savings you got from the initial investment and then when you take that amount out for retirement you'll be taxed again. REVIEW your terms and conditions of the 401K loans. The IRS doesn't want you to "game the system". A 401k Loan should be the least used loan option and in small amounts you can pay back in a short amount of time.
Great vid, as always! To shed some light on rolling a Trad IRA into a current employer's 401k, YES, I am actually doing this right now so as to have a $0 balance in all Trad IRAs so that I can continue to do backdoor ROTH conversions annually. In my case, I verified with my current 401k provider (Fidelity) that they accept Trad IRA rollovers. So, I'm rolling my Vanguard Trad IRA into the Fidelity 401k, which clears the path for backdoor ROTH since I'll now have $0 Trad IRA balances.
Pro Tip: you MUST have a $0 balance in ALL of your Trad IRA accounts (no matter how many you have, or who they are with) by December 31 of the year you did the ROTH backdoor conversion, otherwise you'll still trigger Pro-Rata. Hope this helps!
Thanks for sharing that additional info
worse advice I ever heard on UA-cam was someone telling people to stay away from investing in a 401(k) ... the video was horrific to watch ... if your goal was to lose all your money then go watch that video ... however if you want to do well with your 401(k) watch this video ... once again Jarrad, great video. Keep 'em coming.
There are people saying this?! 😂 I need to investigate these videos
@@JarradMorrowI wish I could find that link for you.
No worries, I already found a few
Probably grant cardone he is against them
@@chriskuhr9325no I know it wasn't him. I've seen that snake oil salesman around ... it as a no name, nobody famous that I have heard of
I max out my 401k that way every raise I get is actually a raise because I can decrease my % contribution.
I do the same!
But what about your Roth In Plan Conversions?
@@TheOmegaFleet It's all in roth.
@@cur244is your match also in Roth or Trad? I never knew for 6 years that I could just put 5% in Roth and it'll still be matched but exclusively into traditional
@@ffnovice7 Oh gotcha yeah you're right employer puts in traditional. Either way I'm saying I just maxed it all out and then every raise after that is legitimately a raise.
My company had a 5 year vested plan. Year 4-5 was rough lol. Right after my year 5 there were some changes and now it is a 3 year plan and I was like.... Oi. Probably wouldn't have pushed through that rough patch.
How often should we transfer our HSA’s from the one we are forced to use with our company to one we want to use like fidelity?
Before I retired last summer, I had plans to roll my lump sum pension into my 401k instead of an IRA to mitigate the pro rata rule impact. Unfortunately, this was prohibited by the 401k administrator because it was not in the contract with my company. So I rolled the lump sum pension into a traditional IRA which caused me to pay taxes on the back door Roth transaction. No big deal. The back door Roth and the mega back door Roth are worth doing regardless of the pro rata rule.
Will you ever keep funds in the traditional instead of rolling over, like when you're in 32-35-37% territory?
Why not roll some of that into a fixed index Annuity?? Downside protection and income guarantee for the rest of your life.
Yes you can roll a traditional IRA into a traditional 401k if the 401k plan allows it. Not all do but mine does.
Thanks for confirming!
Gets tricky when the choices in your 401k aren't as clear cut, or you have to make the least bad choice, ex. my 401k has some consistently better performing funds, that charge over .25 in fees, while others have lower fees, but tend to under perform, and there's no campaign that's going to change that.
My HSA pay flex has that: highest performance has been SEEGX at around .30% expense ratio vs VFIAX at around .015% which has lower overall fund performance
Talk about the 1 year break in as well! We would like to know about it
Great info as usual. Thanks Jarrad 👍🏻
Thanks for checking out the video!
Great useful information. Thank you for creating a video, sir. I do have one question for you tho. In what order should you max out your HSA, Roth 401K, and Roth IRA? For example, my employer does offer a Roth 401K and HSA program. So I usually max out my HSA and Roth 401K first, after that if I have some money left over I contribute to my Roth IRA. Any advice would be greatly appreciated.
I turn 50 next week....I get to max everything again lol.
You already can…it’s the year you turn 50 :)
Nice!
@@mandypdx yep! Already started updating all the auto deposits
Hello I watched your Roth IRA video. Like & learn a lot. I’m about to open Roth IRA with Robin Hood. I like s&p 500 index, ETF and international stock index. I couldn’t find it in Robin Hood. What do you recommend at Robin Hood? Thank you
Awesome information as usual
Fun video. Thanks.
Glad you enjoyed it!
I always thought it was Ross IRA and people were just talking with a lisp
That'th thilly.
Great information! Question - would it be smarter to increase your ROTH vs. 401K each year if you have not been able to max out your Roth yet?
Deciding on Roth contribution vs traditional 401(k) contribution is largely a function of your current tax bracket. Do you know your current federal tax bracket and with your job do you expect to jump 1 or 2 brackets in future?
You brought up 401k fees and I’m slightly confused by it. Help me out here.
While yes I agree you want to go as low as possible….don’t you have to take the funds return into exception?
For example in my 401k I do have an option to invest in a S&P fund at a low .05 expense ratio. But the historical return average since inception is 13.08. There is a growth fund that has a historical return average since inception of 17.60 but the expense ratio is .52
Are you telling me I’m still better off with doing the fund with the lowest expense ratio?
You absolutely need to pay attention to what options are available in your employers 401K.
Previous job had 25 target date olans that all had lost 15-27% over the past 10 years, and one that averaged 3% over the past 10 years. The cash sweep acct paid 4.2% so i left it all there.
I really wish all employers gave full self direct options.
I have two coworkers in their early and late 60s and never contributed to the 401k. As far as i know they don't have debt and earn more than me. I think their income should be good enough for their spending. Don't understand why they don't like free money.
They complain every year about the raise just a few % but never want to contribute to 401k to get the company match 😂
They also don't invest. I guess they just put the money in regular saving account
So sad. They don't understand taxes
condonlences Tim!
I gave him a heads up I'd mention it in the video so he'll see this 😂👍🏻
Another fine video. How's Molly?
Appreciate it! She's great. Still getting in at least 5 mile hikes (off leash) in the woods every morning, has an endless amount of squirrels, chipmunks, birds, etc to chase in my backyard the rest of the day, and tags along whenever I go anywhere that allows dogs around. She's living a better life than 99% of dogs out there and doesn't even know it 😂. Thanks for asking
16:06 that's a wise grandpa right there!
AWESOME video!! So glad to hear you call out the HSA right after you do the 401k match! IMHO, the government needs to eliminate all options to touch your 401k early without penalty. It should be untouchable until you're 59.5.
I was about to disagree with laissez-faire governance, but you might be right because outside of crime, the only reason to withdraw from retirement accounts are usually suboptimal, like for a home or medical or anything that's not life threaten... Well maybe a medical procedure may not be approved in America and you might really need that 10k...
Whatever, we just need to play the game harder
He finally gets to the ONE extremely valuable reason to have a 401K. The employer match. And yes those matches are free money, and you DO need to know your vesting schedule. Now I dont think a vesting schedule is the sole reason to stay or leave a company, but it might be something to consider. (seems like he didnt know his. So I got to ask. If you dont even know your vesting schedule, what makes you qualified to tell people to keep their money in a 401K. I know what makes me. (I made a LOT of money investing smartly).
And I suspect there is at least one thing we do agree on. That is the importance to make regular, contributions to your retirement account., (And it is so much worse than not to, over keeping your investment in a 401K, where the mistake has significant ramifications, but not catastrophic
So many people are saying to their employer "no thanks, I don't want free money".
@@BadPhD777tbf no one told them
DCA is a good baseline strategy but I'm leaning harder into LSI and have maxed my HSA and IRA already. Maybe I'll eat crow by May but I'm banking on the overall 📈 trend
There's another benefit. ERISA. If you get sued for whatever reason your 401k is safe, IRA not.
@@amuseinthecraftroom6257 I will assume you are correct on the ERISA thing. BUT if you had $200,000 in the 401K. You are paying likely $1000 a year for that "potential" issue. But hey, it IS your money. You can do what you want. If you want to spend that kind of money you are welcome to do so
I am currently contributing 10% but my employer matches 2% of annual earned income. Should I not try to max it out Abd out the money elsewhere?
Max out an HSA after meeting the 401k match and DON'T withdraw from the HSA until you retire!!!
I'm sure you've heard from others already, but that 2% blows, I'm sorry. I'm as middle man govt as it gets and I'm getting 5. Not saying you must leave that job, but I would start planning a better career pretty soon.
Edit append: so to answer, just put up to the match (see if Roth is matched), then Max out in increasing order HSA 4150 < IRA 7000 < 401(k) 23000.
I prefer Roth as I'm barely in the 22% bracket and there's more guarantees with paying tax now instead of looming taxes when I'm senile.
After 7 years, I'm finally comfortable enough to try maxxing out my 401; I'm putting more than 4k a month into my r401 to try and hit a bit under the limit by June; the rest of the year is 5 percent of my paycheck to hit close to 22,999$ in order to not waste my taxed money
Is 0.27 and 0.31% considered high fees for a 401k?
Yes, I'd consider those high fees. Are those account fees or fund fees?
@JarradMorrow , I believe fund fees. It is quarterly. When I checked the fees from last year it was only $8. Is their something I am missing? That dollar amount is really low.
Sounds like the $8 might be the account fee. The fees you're paying for the funds you invest in are paid from the assets held in the fund (a combination of yours+everyone else that invests in that fund). Because of that the fund fee (dollar amount you pay) isn't going to show up as a line item in your 401k like the account fee will.
This is one of the reasons a high fee fund doesn't seem like a lot on the surface. We just see the % which isn't as easy to conceptualize compared to if they showed us how much we were paying in a dollar amount. It's why some people don't think a 1% fee sounds like a lot because "1" is such a small number. When you show how much that equates to in dollar terms it's mind blowingly high.
I currently pay a front loaded fee of 2.5% and then an additional 1% fee in the fund itself. Any thoughts on this? Simple IRA plan for my employer.
The mutual fund you're invested in levies a front load of 2.5% ( A shares class) and 1% expense ratio? What's the 5 letter ticker symbol? What are your other investment options?
I might owe you an apology. I was pretty rough on you on your "don't transfer your 401K balance to an IRA". (which I still think is very bad advice.). But I have watched a few other of your videos. And those DO provide useful and good advice. So if I was too rough, consider this an apology. Only thing.... Did you take my comment down? Or was that YT?
You must have my video confused with someone else's because I never said or implied that someone shouldn't transfer their 401k into an IRA. I just re-watched that part of the video 3 times and what you think I said vs. what I actually said are not the same. All I did was lay out the options people should consider when thinking about what to do with their "old 401k". The reason I didn't give a clear cut answer is because there are a lot of things to consider. You might want to go re-watch at 01:20 to see for yourself.
I didn't take any comment down. UA-cam is very good (better than you think) at understanding the tone of a comment to know whether or not they should flag it for review by the creator. I very rarely check the flagged comments because YT is correct to flag a comment 90% of the time. They don't flag comments that are generally critical of the content, but when the tone becomes extremely hateful, they can detect it, which is why it gets flagged for review. There are times when I'm wrong, so I encourage constructive criticism if it's warranted.
I'll check the flagged comments for you right now to see if YT held it for review.
Uhhh yea so I just saw your comments that YT flagged. Holy shit...do you talk to/treat people like that in real life? Like I said, I'm all for constructive criticism that's based on fact, but all of your nasty comments are based on something I literally never said in the video. I appreciate the apology, but wow.
@@JarradMorrow First, I dont thing I wrote anything that disrespectful. (I checked). Second I did apologize for being somewhat rough. Most of my comment was explaining how 401Ks charge fees that IRAs do not. Perhaps something is getting screwed up in the algo. (I did make fun of your comment that IRAs have managed funds while 401Ks may not. But that one did not make any sense to me.
Anyway, if you are advocating that people your age invest regularly, and frequently 401ks provide employer matches, you have no quarlel with me. (Am a little curious what you found so offensive, but I am also willing to just leave it at this.)
17:35 😂😂😂😂
I think IRA is better than 401k, because it keeps your employment separated from your retirement. It also gives you focus and many more choices among etf and mutual funds. 7000 per year as of 2024 is more than most people contribute to 401k anyway. As for employer match, it is not something you can’t retire without, it can be revoked during lay off. They give it only to keep you stay at one place.
Once company match is vested it becomes the employee's and cannot be "revoked" because of lay off.
@@alrockySome companies have done it in the past if you were employed for less than two years.
@@alex182618 Some 401(k) plans have a "vesting" schedule wherein the company match doesn't become 100% yours until you've worked there for set number of years say 1-4 years. With some 401(k) plans the company match is yours immediately.
@@alex182618in other words, the match wasn’t fully vested
You could end up with many smaller 401ks if you change employers a few times which makes management more of a challenge than a rollover IRA, plus you have more investment options in a rollover… also, I had a 401k with a former employer and when they changed providers (from Prudential to Fidelity) my account was automatically moved too…
I didn’t see any benefit to not rolling over… a quick search now says a rollover is federally protected, can you provide your source that says otherwise? That surprises me a little…
Great information. Not everyone can max their Trad/Roth IRA before their 401K. It depends on their MAGI (Modified Adjust Gross Income). So, some people's max is $0. I like using 401K to the max because it reduced my taxes.
Regardless of too high of MAGI anyone who (or their spouse) works may contribute $7,000 to traditional IRA or $7,000 to (back door) Roth IRA
I thought you can increase your deferral/percentage to 401k from your paycheck once a year
You should be able to do it more than once per year. The process of going about it can differ from provider to provider but they shouldn't have a limit on this.
Invest in a new girlfriend
I love the 401k because you cam barrow against it tax free.
That's not a good idea:
1. If you leave a company or are terminated you have 30 days to repay the entire balance or the IRS considers it to be a non qualified withdrawal so you'll have to pay the full tax and penalty on the amount.
2. In some plans you cannot invest in the 401k while you have a 401k loan. REVIEW the 401K terms or discuss with the plan administrator and your tax accountant.
3. It is not a Tax free loan. In most plans the 401k loan repayment is made with after tax dollars so you're losing the tax savings you got from the initial investment and then when you take that amount out for retirement you'll be taxed again. REVIEW your terms and conditions of the 401K loans. The IRS doesn't want you to "game the system".
A 401k Loan should be the least used loan option and in small amounts you can pay back in a short amount of time.