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One commonly overlooked benefit of making the maximum annual contribution to a 401(k) retirement plan is that it can boost your child’s chances of getting financial aid when it’s time for college. Unlike savings or investment accounts, 401(k) accounts are excluded from most college aid calculations.

Your current 401(k) contributions also reduce your taxable income.

Thinking of funding your child's college education by borrowing from your 401(k)?  You may be able to borrow from your 401(k) for your children’s education under certain circumstances. Check out your plan’s loan rules. Some plans don’t allow loans or have restrictive provisions.

While you may be allowed to borrow from your 401(k) for college costs, there are plenty of reasons to avoid it.   If you leave or lose your job, you generally have to pay the loan back immediately. If you don't, the loan will be considered a withdrawal. You'll have to pay taxes on the money and may face a 10% early-withdrawal penalty if you leave your job before age 55.