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Deal with Your Debt: The Right Way to Manage Your Bill$ and Pay Off What You Owe by Liz Pulliam Weston

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Types of Plans That Offer Loans

Right off the bat, you need to know that not all retirement funds allow loans. You can't get a long-term loan from an individual retirement account (IRA) or a Roth IRA, for example. (You can take money out for up to 60 days, but if you don't put it back, it's considered an early withdrawal—which means you'll pay taxes and penalties.)

By contrast, workplace plans like 401(k)s and 403(b)s aren't required to allow loans, but most of them do. So do many 457 deferred compensation plans offered by government agencies.

There are some differences between these three major types of workplace plans, but all three allow workers to contribute pretax money, with their investments growing, tax-deferred, until they are withdrawn. ...

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