Some retirement plans permit loans, others don’t. Federal regulations forbid loans from IRAs, including SEP and SIMPLE IRAs. This is true for Roth IRAs as well. Employee Retirement Income Security Act (ERISA) regulations allow you to borrow money tax-free from your qualified defined-contribution plan (i.e. 401(k), 403(b), 457, and Thrift Savings Plan). However, certain rules apply: The plan sponsor must allow loans. Some plans require spousal consent on loans greater than $5,000. The maximum amount you can borrow is the lesser of 50% of your balance or $50,000. If your balance is between $10,000 and $20,000, you can borrow up to $10,000 despite the 50% rule. You must repay the loan within five years. You can take longer if you use the loan to build or buy a home. You must pay interest on the loan. The interest, minus any fees, is deposited back into your account. Failure to repay on time will convert the loan to a taxable withdrawal. A loan from your retirement plan might come in handy, but it is not without cost. Beyond the fees and interest, you lose the tax-free growth on the borrowed amount until you repay it. In addition, you’ll have to immediately repay the loan balance if you separate from your job.