Example Scenario: Repaying after one year using a 401(k) withdrawal. Left employer.

This is an example, intended to help people understand how using Lendtable can help to build retirement savings. 

Sarah just started a new job and her 401(k) balance is $0 but using Lendtable 401(k), she can save $9000 in her 401k and make a net  profit of over $6000 by using Lendtable for 1 year.

Her employer matches 50% of the contributions she makes into her 401(k), up to 100% of her salary or the IRS limit of $22,500 and her salary is high enough to maximize this match.

Sarah wants to get her full match but needs to prioritize saving a down payment for a new home over saving for retirement.

She decides to sign up for Lendtable 401(k) and will use the line of credit to replace the income she loses by contributing to get her full 401(k) match.

She contributes $937.50 every pay period, or $22,500 throughout the year, and her employer contributes $11,250 in matching contributions.

This results in her paycheck being reduced by $750 each pay period after taxes.

She uses her Lendtable 401(k) line of credit to replace that $750 each pay period. 

She verifies that she is contributing to her 401(k) and the money is deposited in her checking account each pay period. A $10 monthly fee is withheld from one deposit per month.

After 12 months, Sarah has saved $18,000 for her down payment and has received her matching contributions.

Sarah’s 401(k) balance is $33,750 — $22,500 from her own contributions plus her employer’s matching contribution of $11,250.

Sarah decides to stop using Lendtable so her balance is now due.  

She owes $19,800 — $18,000 line of credit used plus $1800 fee (20% of $9000 employer match earned using her line of credit)

She withdraws money from her 401(k) to pay her balance due. 

Because she is under 59 ½ years old, her withdrawal is subject to a 10% early withdrawal penalty.

The withdrawn amount is subject to income tax.

She withdraws $24,750 ($19,800 plus 20% automatically withheld for taxes) from her account.

This leaves Sarah with a balance of $9000 in her 401(k) account ($33,750 - $24,750)

She may have up to a $2475 tax liability due for the early withdrawal penalty 

She has paid $120 in monthly fees - $10 per month for 12 months. 

Sarah has a net profit of $6406