Why Americans Keep Treating Their 401(k)s Like Piggy Banks | Time by Dan Kadlec
Borrowing from your 401(k) plan has advantages. But it should not be your first option.
Consumer borrowing is on the rise again, jumping nearly 10% in July—the biggest gain in three years. The largest loan sources were related to auto financings and credit cards. But since the recession, 401(k) plan loans have been rising as well.
One in four American workers with a 401(k) or other defined contribution plan taps their retirement account for current expenses, according to a report from financial website HelloWallet. Much of this money never gets repaid.