Our pension consultant has said that taking out a loan that will be repaid from your pension is not a wise move.

  • The loan never gets paid off and the loan amount becomes a distribution as far as the IRS is concerned. You may be required to pay income tax on it.
  • Your pension will be permanently decreased to pay off this loan and your monthly pension amount will be reduced FOREVER!

In a recent issue of The Chief Civil Service newspaper, a columnist that writes about pension issues, says the same. Click on the link below for the article and look for the hi-lighted paragraph.

Only you can decide the best for your needs. Anyone (including our retirement consultant) can only give advice.