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Comment by stocknoob | Hacker News Reader

Seriously. They are working for a huge name-brand tech employer, and have the best chance of getting a new job (see the LinkedIn replies), but oh yeah, if they run out of severance, and have no emergency fund (because reasons), and their shares are temporarily locked up, whatever will they do? Take out a 401k loan like a plebe?

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You can't take out a 401k loan if you don't work there any more. In fact, that's one of the major drawbacks of 401k loans. If you leave employment, you have to repay the loan within a set time period, or treat it as a disbursement.

That said I agree, complaints about "what will happen when my severance runs out!" did elicit a bit of an eye roll.

I'd never heard that... can you roll it over into an IRA and take a loan against that?

Maybe, but have you tried getting a loan approved with no income?

Its a loan against yourself

Banks still want to see evidence of your ability to pay it back.

401k “loans” are a misnomer. There’s no underwriting or leverage. It’s an unpenalized withdrawal with payback (as opposed to regular early withdrawals, which are penalized).

As discussed upthread, 401k loans are not generally accessible to unemployed people.

You technically cannot take out a loan against your IRA. You can do a withdrawal and payback though - I believe there are some tax considerations / early withdrawal risks

They'll be left to deal with serious intractable life issues, like having to switch from San Pellegrino to store-brand seltzer water.

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