<p>I’m wondering how your kids feel about this. Anything special comes from mom alone?</p>
<p>I’m surprised at the number of people advising someone to take out loans on retirement accounts/life insurance which have serious financial implications…whether it’s extra taxes for early withdrawal or penalties for not paying back in a timely manner/observing all legal niceties. </p>
<p>Doing the above for high-ticket discretionary items is financially imprudent at best…and could seriously mess up family finances for even those in the upper-middle classes. </p>
<p>I’m a bit concerned here as I’ve seen several families seriously mess up their finances by doing the above to buy high-ticket item for their kids/adolescents. </p>
<p>Especially if some sudden unforeseen circumstances happen such as an unanticipated layoff, emergency family medical expenses, or emergency house repairs. </p>
<p>Please, take a step back and seriously consider all of those factors before you proceed on a course you may later regret.</p>
<p>No one is advising Zoosermom to take out this type of loan. It is what she has said she is going to do. After 13 pages I understand and agree with her reasoning. It’s only $5000. There are no tax implications and there will be no penalties if she pays it back on time. The most there will be is a charge for borrowing the money.</p>
<p>People are emotional about money, both those who are spenders and those who are savers. Of all the ways to get $5000 this way will be the least aggravating to Zoosermom’s husband. Maybe some of us posters don’t like the dynamics that we are hearing about but they’ve been married a long time and that counts for something.</p>
<p>I’ve been married a long time too. I’m sure plenty of people would have problems seeing the inner workings of how we manage finances and house cleaning issues and raising our kids. In fact I know people would have problems because my in-laws have problems which they have let us know. Whatever we have hashed out makes sense to us. There is a give and take on both sides.</p>
<p>I agree with Cobrat. I just think that if the only source of money is a loan from a retirement account – then it is simply not something that the family can afford, no matter how much the mom wants to make the purchase.</p>
<p>However, I’m still wondering why the purchase itself cannot be independently financed. The only expensive musical instruments I ever bought were pianos, and we always financed those – the piano sellers offered long-term financing with very low monthly payments. If Zoosermom were paying $60/month to a consumer finance company rather than to restore 401K money, then she wouldn’t face the pitfalls that come with 401K borrowing.</p>
<p>Zooser, did you know that if you lose your job for any reason, you would have to pay back the entire 401K loan within 60 days, or face the same tax penalties that come with a premature distribution? See [401(k)</a> Loans - Nine Things to Know About Borrowing from Your 401(k)](<a href=“http://retireplan.about.com/od/401kplans/a/401k_loan.htm]401(k)”>The Pros and Cons of Taking a 401(k) Loan) - I strongly agree with the statement in that article that “While a 401(k) loan has some benefits, its significant negatives ought to be avoided except during a genuine financial emergency.”</p>
<p>The point isn’t whether it’s a good idea or not to buy your son the clarinet – it’s just that it seems like a really bad idea to plan to finance the clarinet by borrowing from the 401K. You have time – so use that time to come up with a better plan.</p>
<p>
Deep sea fishing? Who does that?</p>
<p>
Not sure where you got that from. Certainly not from anything I posted.</p>
<p>
Please take your concern and find someplace worthwhile to direct it. I’m sure there are plenty of people who would appreciate your concern. based on misunderstandings, though it may be.</p>
<p>
Calmom, please read my posts, not Cobrat’s. He has serious, serious comprehension issues. I have posted very clearly that we have the cash in bank accounts, investments, etc. It is NOT ABOUT THE MONEY. It is about moving around my husband, if I so choose, in three years. If I lose my job, I will pay off the loan out of savings. One more time. We are financially secure.
Unless the specific plan allows for repayment monthly afterward. Mine does.</p>
<p>I know you mean well and I always appreciate your wisdom. But you’re simply reading into this thread a lot of things that exist only in Cobrat’s imagination.</p>
<p>I started this thread not beause I need advice, I don’t. Not because I want to buy something I can’t afford, but simply because I had never known about this consent thing and it bothers me greatly. Agree, disagree, fine. It’s a venting thread.</p>
<p>But if the money is available to you in savings… then why borrow at all? Why not just write a check from a savings account or cash in an investment?</p>
<p>
As I said countless times in the thread, the only account that isn’t joint is the 401-K and it is my personal sign of respect to my husband that I am considering doing this in a way that doesn’t force him to pay for something he doesn’t support. Again, it’s not the money. It’s the difference of opinion, and it is still three years away. As I also said, he knows I want to buy the clarinet, but I came here to vent about tthe 401-K thing because I wondered if it was universal. Hubby doesn’t even know I’ve ever considered that, and I’ve certainly not acted on it. I may be selling him short. A child can change a lot between 13 and 16, so my husband may even have a totally different perspective by then. Or my son’s passion could change. Who knows? It really was a thread to vent and to find out what the rules were for others’ 401-k accounts. Turns out that there is some variation. Cobrat means well, but sometimes he’s like Roseann Roseannadanna where he takes something that wasn’t posted and runs with it until it’s pointed out that his tangent had no basis in anything that was posted. This is that. I understand that some people are judging the finances of my marriage, but it’s misplaced. Hubby and I are both incredibly frugal. He golfs with my son, but he comes home for leftovers for lunch every day and spends the allocated money on outings with my son. I think that’s wonderful. If there is a change to be made, it’s likely that we have a habit of accounting for every penny in a category. Maybe we need to be a little freer with some of the discretionary funds. Definitely I have to make sure he understands that there will be come purchases that he doesn’t agree with but will have to accept unless they are financially risky or compromise his principles in some way. I am grateful that so many people have offered such wise, compassionate insight.</p>
<p>I think that was actually Emily Litella you were referring to. ( who me? I’m not distracted)
;)</p>
<p>OK, but the point is that you are mistaken to believe that your 401K isn’t “joint” – the law gives your husband an interest in it. If you were to decide to get divorced (which clearly is not your intent), the 401K would be part of the property to be divided by the court. Just because his name is not on the account doesn’t mean that he doesn’t have a legal interest or right to determine what is done with it. </p>
<p>I’m not trying to pass judgment on your marital finances. It’s just that you seem to have set up some sort of arbitrary distinctions about money in one pot vs. money in a different pot, which simply are at odds with the requirements set by law. You can vent if you like, but my point is simply that you now know that you were mistaken about the 401K, so you should figure out another plan for buying the clarinet. Again, there’s nothing that prevents you from applying for credit in your own name, so if you don’t want to pull cash out of a joint bank account, the easiest thing to do may simply to finance the purchase through whatever option is offered by the seller.</p>
<p>
No, Roseanne Roseannadanna from Saturday Night Live. Go on a tear about something misunderstood, and then say “never mind” when it’s pointed out.</p>
<p>
Which is exactly what I said in my first post and why I said that the thread was a venting thread and not a request for advice. I don’t know how I could have possibly been more clear about that.</p>
<p>Trivia:
Roseanne Roseannadanna was modelled after the ABC news anchorwoman from the 70’s Roseanne Scamardella. But I don’t remember her botching news stories and getting words paraphrased.</p>
<p>This is another side twist and turn of the thread, which happens to threads all the time. Its like the old game of “telephone”- how it starts and where it ends up may be very different!</p>
<p>
True! But twists and turns are different from misunderstandings, which I think should be corrected.</p>
<p>Few years back, when we had D1’s college tuition and D2’s private school tuition due at the same time, and my expected source of cash was late in coming, I did borrow against my 401K for a very term. It was better to liquidate some of our stock portfolio at the time. I manage MY company 401K online. With few clicks the money was in our checking acct within days. I never even consulted H, and my 401K management firm didn’t require any signature from H. The dynamic between H and I is he completely trusts my judgement when it comes to finance, and we operate under whatever is mine is his, and whatever is his is mine. We always had joint accts, but he just chose not to worry about it (of course, that also presents its own problem).</p>
<p>There was no penalty in borrowing against my 401k, interest I paid was paid to my account. I don’t see what the problem is.</p>
<p>cobrat is not married, has no children, all of his life experience has been through his “dysfuntional extend family” and friends similar to his age. Until you have been married 20+ years, it is very hard to understand or appreciate dynamic of long term relationship.</p>
<p>As usual oldfort, great advice. My H also borrowed from his 401k for a house purchase a long time ago. I did not have to sign off on it and did not receive any information that he had done it. Our 401k also is managed on line. I just upped our contributions as we are (hopefully!) done with college tuition and it was just a couple of clicks.</p>
<p>Right now our account is actually making money but there were years that paying ourselves back with interest made more money than the stock market was doing at the time. </p>
<p>I haven’t read all of this but it sounds like a control issue. All marriages go through this and I feel for zoosermom. She works full time, has for many years and looks to work for 10 more years than her H. She should have some control on how she wants to spend the money she makes.</p>
<p>Maybe this is one instance where you buy and then ask forgiveness.</p>
<p>
</p>
<p>No, that was Emily Litella, also played by Gilda Radner.</p>
<p>Roseanne Roseannadanna would also digress from her original point, and eventually go on and on about gross bodily functions, or nauseating hygiene dilemmas like cutting thick toenails or nose hair, culminating with her usual phrase “What are ya tryin’ to do, make me sick?!”</p>
<p>Eventually, Jane Curtin would interrupt, asking her what her comments had to do with the subject at hand. Roseannadanna’s response was, “Well, Jane, it just goes to show you, it’s always something–if it ain’t one thing, it’s another.”</p>
<p>Back to your regularly scheduled program. :)</p>
<p>zooser - as the owner of a business I administer the 401k loans and handle payroll.</p>
<p>I have had 3 employees get loans from their 401k’s and they have not needed a spouses signature. The loan has to be paid back through payroll however.</p>
<p>Also, if your payroll comes direct deposit you can direct that paycheck into as many accounts as you want. I have an employee who puts it in 3 separate accounts. Just contact whoever does your payroll.</p>
<p>Hubby and I have a separate “school” account and money gets taken out every paycheck and directly deposited into that account as well as a bunch of other automatic savings set up that has been for private school tuition. </p>
<p>We each have our own accounts. It came from years ago trying to buy presents for each other and having no way to do it without the other seeing. </p>
<p>I chuckle because so much money just immediately gets taken and shot off in so many different places I really only get a small fraction of my salary. </p>
<p>From all of this I’m more bothered by the relationship aspect than the frustration over needing a signature. Sometimes you just let something go because it’s important to the other person. This sounds like it is no big deal financially, but goes more to the heart of the respect you get for what you want. But then again, I’m puzzled by the fact that you’re okay with him buying a condo and saying you aren’t going. You two aren’t in synch for the clarinet is not that huge a thing - not being in sync over retirement and where you’ll live is huge to me. And you’re just digging your heels in on that one saying you’re doing what you want period. You are being just as stubborn.</p>
<p>He could come here and post a very compelling post from his perspective and we’d probably all be more shocked by you. </p>
<p>Two sides to this story for sure.</p>
<p>Though it is not federal law, maybe not even state law that requires spousal signatures on 401K Plans that is part of the “cost” that a company may put on having such a plan available because they find that it reduces potential problems in the future that they do not want to have. That is part of their requirement for providing the plan and is falls into a number of other administrative requirements firms might impose because statistically it works out better to have those provisions. It is not a primary activity of a company to have these plans so they will take the route that leads to the least hassles.</p>
<p>I’m with zoos, here. Dunno if it’s really a law or just a DoL reg, but it’s dumb. It maybe great public policy, and a really small thing, but still an intrusion on my freedom; therefore, dumb IMO.</p>
<p>(And btw, HR reports to me and I just love having to explain to my my young employees why the government is making them jump through hoops to get at their own money.)</p>
<p>I always thought the signature requirement was because so many husbands took their max pensions and died leaving their spouse destitute. I also recall a major corporation being sued by a spouse when they allowed the withdrawal of lump sum retirement plan funds by the employee who quickly turned the lump sum to dust. The spouse felt the withdrawal was unfair.</p>
<p>Seems to me we either tell everyone you are on your own or we pass requirements to offer some minimum requirements to keep the spouse informed.</p>
<p>
Excuse me? that’s exactly what I’m NOT doing. That is an incredible stretch. What I have said is that this is very important to me, but I am working very hard to find a way to do it without forcing my husband to pay for it. Which is something I’ve done before under other circumstances. Unfortunately, the current economy forces me to make other plans.</p>
<p>As for the condo, as I said, the reason I’m fine with it is because it’s not unreasonable. It is financially feasible, he has prepared for it I think the family could enjoy it on vacations. What I will not do is retire before I am ready. I get the final say on that. And heck, there are some spouses who would be happy to continue to have a six figure income entering the family budget after they retire. And ultimately, I think living away from family and friends will lose its appeal quickly and he will become one of those people who enjoys a vacation home at various times of hte year.</p>
<p>
It’s a loan, not a withdrawal. Withdrawals I can understand. Not loans. </p>
<p>I learned something else that I hadn’t known but find interesting. My husband can take pension loans (never has, so this hasn’t come up) and I do not need to consent. However, in his plan, he can’t take any loans in the last three years before he is eligible to retire. I guess that’s another way of making sure that everything is in good shape.</p>
<p>It is pretty clear that individual states and/or plans do have some discretion in setting rules.</p>