Survey: More Americans Borrowing from 401K for Non-Essentials


Some people would never dream of taking even one penny from their retirement account, but others see it as just another pot of cash from which to spend.

Survey results released by TIAA-CREF, entitled Borrowing Against Your Future, shows that some workers are getting downright reckless with their retirement savings.

The economy has gotten slightly better, and some retirement savers are using this as an opportunity to go crazy. A few are taking a chance on their luck by using retirement money for non-essential expenses like vacations and home improvements.

According to the research, one-third of Americans (23%) who participate in a retirement plan say they have borrowed from their plan. About 44% regret their decision.

Those who decide to borrow against their future borrow quite a bit. About 47% borrowed more than 20%. Even more disturbing is that about 9% borrowed more than 50% from their account. This behavior leads to even more destructive patterns. It was found that those who are in repayment are more likely to decrease their contribution rate during the repayment period (about 81%).

Key Findings:

Most survey respondents said they took out a loan to pay off a debt (about 46%).
– The second most popular reason for borrowing against a retirement account was to pay for an emergency (35%).
– More men (29%) than women (40%) were likely to take out a loan for an emergency.


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