Hi everyone and welcome back to Money Girls Quick and Dirty Tips for a richer life.

I'm Laura Adams.

In last week's show I told you about the limited situations in which you're allowed to take a withdrawal from a workplace retirement plan, such as a 401k or a 403b. I mentioned that taking a loan from these

types of plans might be a better option in some cases. However, taking a loan from your

retirement account isn't necessarily a wise decision either.

We'll take a look at the potential dangers and the rules for borrowing from your workplace retirement account.

The first hurdle to getting a loan from your 401k or 403b is that it's only allowed if your employer's plan permits it.

You'll find the rules and benefits of your retirement plan

in the summary plan description document which you should receive each year.

Or you can just ask your benefits administrator if loans are allowed.

Due to the paperwork and time that's usually benefits administrator if loans are allowed.

Due to the paperwork and time that's usually required to administer retirement loans,

it's been my experience that small companies usually don't offer them.

If you can borrow from your retirement plan,

there's a ceiling on how much it can take out.

You're generally limited to borrowing no more than 50%

of your vested account balance,

up to a maximum of $50,000.

So if you have $10,000 that's vested,

you can only borrow a maximum of 5,000 or 50% of your account.

Your vested balance is the amount of money in the plan that you own.

You're always fully vested in your contributions,

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