401(k) Loans and Withdrawals

2024 Plan Information

401(k) Loans & Withdrawals

The Morgan Stanley 401(k) Plan is designed to be a long-term retirement savings vehicle. As a general rule, you should never borrow money from your account. However, if you have no other options available to you, you may be able to borrow money from your vested 401(k) Plan account.


  • You must be an active employee who is not a member of the Morgan Stanley Management Committee.
  • You may have only two outstanding loans at a time.
  • There is a $75 loan initiation fee for each loan requested.
  • The minimum loan amount is $1,000, and the maximum is $50,000 or up to 50% of your vested account balance, whichever is less, including the initiation fee. The available loan amount must take into account any previous 401(k) Plan loans outstanding within the 12-month period preceding the loan initiation date.
  • Loan repayments are deducted automatically from your regular paychecks.
  • You have up to 15 years to repay a loan for the purchase of your primary residence and up to 5 years to repay a loan taken for any other purpose.
  • You can make partial-loan repayments at any time through EFT, or by cashier’s check or money order. Any partial repayments will be applied to your remaining principal. Partial pre-payments will not decrease the amount of your ongoing payments, but you will pay off your loan sooner, reducing the interest you pay over the life of your loan.
  • You may also prepay your loan in full at any time by cashier’s check or money order.
  • The interest rate for your loan will remain the same for the life of the loan.
  • Loan repayments are invested according to your current 401(k) Plan investment direction on file.
  • If you have an outstanding 401(k) Plan loan when your employment ends, you may continue making loan repayments for the remainder of your loan period. You must avoid defaulting on your loan. If you default on your loan, the outstanding amount will be considered distributed to you, and you will be responsible for any taxes and penalties incurred.

To make a partial loan payment, visit the Benefit Center website and then click Savings & Retirement | 401(k) Savings Plan | Loans | Make a Partial or Full Repayment.

While you may think that taking a loan from your 401(k) Plan account now and paying your account back with interest is a great idea, it may have a direct impact on your ability to adequately save for retirement. The purpose of the 401(k) Plan is to save for retirement and taking a loan lowers your savings potential. Additionally, it may take you years to repay the loan, which means you’re missing out on growing your money through compound savings. And unless you continue to make contributions to your account while you’re repaying your loan, you’re also missing out on the Company Match. Finally, if you leave the Firm, you are generally required to repay your loan in full or you will be taxed on the withdrawal.

Before you take a loan, you may wish to speak with financial or tax advisor to explore other alternatives that won’t put your retirement savings at risk. Additionally, the Benefit Center website allows you to model 401(k) Plan loans in different ways, and see how much you can borrow, how much you would have to pay back each payroll period and how long it would take to repay your loan.