Differences Between 401K Loans vs. Equity Sharing Agreements

401k Loans vs. Equity Sharing Agreements: What to Consider

When it comes to retirement planning, 401k loans and equity sharing agreements are both popular options. But which one is right for you?

Here are some things to consider when making your decision:

401k Loans


-You can borrow up to $50,000 or half of your vested balance, whichever is less.

-The interest you pay on the loan goes back into your account.

-You have up to five years to repay the loan.


-If you leave your job, you typically have to repay the loan within 60 days or it will be considered a withdrawal and subject to taxes and penalties.

-If you can't repay the loan, it will be treated as a withdrawal and subject to taxes and penalties.

Equity Sharing Agreements


-You can get access to cash without having to repay it.

-You can use the equity in your home to supplement your retirement income.


-You may have to give up a portion of your home's equity.

-If the value of your home goes down, you may end up owing money to the equity sharing company.

So, which is right for you? It depends on your individual situation. Be sure to talk to a financial advisor to see what makes the most sense for you.

Get Started