Navigating the Tax Implications of Retirement Plan Loans

ARTICLE | October 06, 2025

Borrowing from a retirement plan can seem like an appealing option if you need quick access to funds. Certain qualified plans, such as 401(k), profit-sharing, or Keogh plans, often permit plan loans under specific conditions. However, individual retirement arrangements like Traditional IRAs, Roth IRAs, SEP IRAs, and SIMPLE IRAs generally do not allow loans. While borrowing from your retirement plan offers a short-term cash infusion, it also carries significant tax and financial consequences. Understanding these implications is critical to making an informed decision.

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