Can I Borrow From My Fidelity Retirement?

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It is possible for you to borrow from a Fidelity Retirement fund. However, the company advises you think long and hard about taking a loan from this account. Fidelity's website warns against the potential negative consequences of such borrowing, including the failure to save sufficient money for retirement. Before borrowing from your retirement account, Fidelity recommends comparing loan terms offered by credit card or banks.

Terms and Conditions

Retirement fund holders must fill out a loan request form with Fidelity. In most cases, the loan must be repaid within five years unless the money is being used to buy a primary residence. If that's the case, the loan might extend for up to 10 years. If you're married, the loan might require written spousal consent. If you leave your job, the loan must be repaid within 60 days of the date of your departure.

Loan Amounts

If you have less than $100,000 vested in your Fidelity account -- the amount that you invested pre-tax, not necessarily including employer contributions -- you can borrow up to 50 percent of that amount. If you have more than that amount, you can only borrow up to $50,000. Employer contributions are often not vested for several years. Minimums might also apply, with Fidelity requiring that you borrow at least $1,000. Expect a one-time "set-up" fee along with a maintenance fee each quarter, in addition to interest fees. If you're 59 1/2 or less, the Internal Revenue Service will take 10 percent of the loan as an early withdrawal penalty.

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