Question on 401k loan......

[Chris Masons]

I have a question on borrowing from ones 401k:

When I borrow say 50k from my 401k and pay it back do I lose my position I originally had in my investment? In other words say I owned 2000 shares XYZ fund at 24.00 per share....

NOW, it's time to pay the 401k loan back, and XYZ shares are trading at 5.00 a share, do I get my holdings at what they were originally at or at current market value?

thx in advance!!

Chris

[Jon Holdman]

When you take the 401k loan it comes out of your cash balance. You will have to liquidate shares or mutual funds to convert to cash. You'll do that at todays prices. When you make the repayments, you direct how that money is to be allocated. Whatever you buy with the repayment money buys shares or mutual funds at the price when the repayment is made.