A 30-year-old man with an annual income of $40,000 (assuming 3 percent annual raises) and a 401(k) balance of $45,000 contributes 6 percent per year to get his full employer match (3 percent).
Assuming a 7 percent investment return in his 401(k), his nest egg will grow to $1,188,091 by age 65.
If he borrows $8,000 at a 6.75 percent interest rate, however, and pays it back over five years without contributing to the plan during the payback period, his ending balance falls 14 percent to $1,020,845 at age 65.
Source: Hewitt Associates.