Wells Fargo 401(k) Loans Jump 28% as Older Workers Borrow

 

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Wells Fargo 401(k) Loans Jump 28% as Older Workers Borrow

The number of people taking loans from their 401(k) retirement accounts increased 28 percent in the fourth quarter from a year earlier as older workers tapped their savings, according to Wells Fargo (WFC) & Co.

The number is based on 1.9 million survey participants who have 401(k)s administered by the company, of which 34,987, or about 1.8 percent, took out loans, the San Francisco-based bank said today in a statement. The average new loan balance rose 7 percent to $7,126.

U.S. workers may borrow from their 401(k) and pay the loan back to the account if their employer’s plan allows it, according to the Internal Revenue Service. Individuals who demonstrate financial need for reasons including medical expenses or the purchase of a primary residence also may take a so-called hardship withdrawal. Savers in their 50s were the most likely to borrow against their 401(k)s, Wells Fargo said.

“The increased loan activity particularly among older participants is concerning because those are the years when workers can start to make ‘catch-up’ contributions and really need to focus on preparing for retirement,” Laurie Nordquist, director of Wells Fargo Retirement, said in the statement. “This age is also the ‘sandwich’ generation, caught between paying for their kids’ education and supporting elderly parents.”

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Comments
3 Responses to “Wells Fargo 401(k) Loans Jump 28% as Older Workers Borrow”
  1. Poof says:

    So the Banksters end up with you’re home & you’re 401k be very careful when it comes to this kind of situation.The Banksters do not have a heart !

  2. Carol says:

    Oh Great. OMG, will this EVER stop?

  3. neidermeyer says:

    Better to borrow your own money now and buy necessities than wait for the government to seize your money.

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