Comments on: 401(k) debit cards: Worst retirement planning idea ever?

By: Janice

Janice — Tue, 26 Aug 2008 18:16:42 +0000

Oh, Jackie I absolutely feel your pain! I have the same problems and do the same preaching to no avail. And we also have employees who pay off loans and take another almost immediately. They think of it as a savings account rather than a retirement account, which is just frightening to me!

By: Jackie T - SPHR

Jackie T - SPHR — Tue, 26 Aug 2008 18:13:41 +0000

Today, my company already allows 2 outstanding loans to be held (residential and/or general loans) at any one time (with some monitary restrictions) and I have many employees that ALWAYS have 2 loans out. As soon as they pay off one, they apply for another one. This is a disaster for a 401K plan. We make it too easy and a “debit” card would cause a catastrophe for many employees who already have trouble “planning” for their future. I constantly preach to my employees that they have to actually think and plan to get where they want to be, it isn’t going to happen by accident or in a vacuum.

By: Janice

Janice — Mon, 25 Aug 2008 12:15:03 +0000

401K loans have run rampant in our company this year. I can’t imagine giving people a piece of plastic with license to withdraw at will – what a disaster!

By: Suzanne

Suzanne — Tue, 19 Aug 2008 21:15:02 +0000

This is a very bad idea. 401k loans are misused often enough, and the debit card sounds like it would make it extremely easy to withdraw money for an impulse purchase or as an easy fix to a financial problem when other solutions might be available. My organization would never consider this. We only allow loans for hardship reasons. It is very important for retirement funds to be saved for retirement.

By: Michele

Michele — Tue, 19 Aug 2008 17:59:50 +0000

This is definitely a terrible idea. The way a lot of people spend today without regard for their credit, let alone their retirement, scares me enough as it is. These are the people we will be bailing out with some sort of government subsidy or another because they cannot or will not handle their finances in a responsible manner. Meanwhile, those of us who are responsible and try to put aside money for our retirement will end up suffering in the long run. I really hope employers do not give in to pressure from employees to institute a 401K debit card because it just spells trouble.