Borrowing from your 401K to re pay your mortgage sounds interesting. You basically borrow the money from yourself and then instead of paying the % to the bank, your 401K gets to keep that money. I'd rather pay interest to my 401K than giving it to the bank.
Let's say I borrow 40K from my 401K at 8% for 5 years and with that funds I pre-pay my mortgage which costs 6% annually. At the end of 5 years I would have 50K in my 401K, my mortgage would be 40K less plus I would not have to give the bank 6% of that for that 5 years AND any other years still left on the loan. I see your point of double taxation. You must re pay the loan with money that had already been taxed and then when you take distribution you get hit again. However, that can be postponed for most of us for at least 30 years. I'd rather have my house paid off couple of years earlier and get to enjoy the money that would otherwise get spent on mortgage.
First, you can trade your 401K as long as your employer has the option of a brokerage account. Many large employers now offer this option via Schwab, Fidelity, etc. I believe futures are not allowed in the 401K because of leverage.
Interesting idea. What happens if you borrow from your 401k, pay down your mortgage, and at some point you can't repay the loan. 1. Are there tax consequences? Would you get hit with a large IRS bill? 2. Can the 401k administrator sue you for the defaulted loan? 3. If you borrowed from a roth IRA to pay off your mortgage at 6%, and pay back into the roth at 8%, doesn't that get around the issue of double taxation? And a roth earning 8% is nothing to sneeze at... Assumption is that you have no other debt besides mortgage and 30% average tax bracket. Any CPA/tax types out there that have any idea?
Bottom line - what can you trade from an IRA account? I have read that you can trade futures, but can't have a margin account (scratches head). I have also heard you can trade futures but only cash settled futures. And you can buy and sell options, but no writing options. Is there a definitive source as to what on can trade rather than the "I think" comments?
Yes, the brokerage that has your account will tell you what they allow. If you really thought you would get an answer for your particular broker from an message board, well enough said.
I have a SEP IRA account with IB and I trade futures with it. I have a solo 401k with Fidelity and trade equities with that, mostly swing trades though since their comm rates aren't good. $49k max contribution to either per year.