ATM card linked to your 401k account - insanity

[disneysteve]

I heard on TV today that many companies are now offering employees the ability to use an ATM to withdraw money from their 401k accounts. The withdraws are treated as loans subject to the usual 401k loan rules.

Just when I think I've heard every insane financial deal, something like this comes along.

[txex86]

Anything to get more money into the hands of consumers to keep them spending.

[sweeps]

I heard on TV today that many companies are now offering employees the ability to use an ATM to withdraw money from their 401k accounts. The withdraws are treated as loans subject to the usual 401k loan rules.

Wow. This country has jumped the shark.

[Taribor]

Anything to get more money into the hands of consumers to keep them spending.

Kind of funny (in a sad way) how our money burns a hole in Uncle Sam's pocket.

[Like2Plan]

I heard on TV today that many companies are now offering employees the ability to use an ATM to withdraw money from their 401k accounts. The withdraws are treated as loans subject to the usual 401k loan rules.

Just when I think I've heard every insane financial deal, something like this comes along.

All I can say is. "WOW!"

Both DH and my place of employment have pretty strict rules in place. I think DH's is more restrictive than mine. But, I seem to recall there is a processing time (it could be up to several weeks depending on when you submit the paperwork). The other rule is that you can only have 1 loan type at a time (I think there are 3 types-(1) for a first time purchase of a home, (2) for any reason and (3) hardship). I guess these are not IRS rules..

[disneysteve]

Wow. This country has jumped the shark.

Am I showing my age if I say that comment immediately brought an image of Fonzie to mine.

[kv968]

Am I showing my age if I say that comment immediately brought an image of Fonzie to mine.

I guess I'm showing my age too because that's exactly what I thought too.

AAAYYYEEEEEEE!!!

[Ima saver]

That is just awful!

[jodi]

Am I showing my age if I say that comment immediately brought an image of Fonzie to mine.

Well, my understanding is that Fonzie IS the origin of the phrase since Happy Days started to go downhill after that episode. I've never heard 'jump the shark' applied to our country before, but I can't say I disagree...although I might have said the jump happened a while back...

[disneysteve]

Well, my understanding is that Fonzie IS the origin of the phrase since Happy Days started to go downhill after that episode.

True. I was just referring to the fact that I actually watched the show at that time (not in reruns years later). I'm sure there are plenty of people my junior who don't know the origin of the term and have no idea who Fonzie was.

[Joan.of.the.Arch]

But WHY would companies offer that? What advantage is it to them? Is it a recruiting advantage? If so, how bizarre! Is it that so many people are asking for loans from their accounts that it is costing the management companies too much person-power (money) to process them all, and automating the loan with ATM cards is cheaper for the management companies?

I sure wish there were a way to counter the spend, spend, spend messages out there with a save, save, save, you might not be able to work forever message. My basic fear of destitution motivates me. Nobody else has this fear? It must be nice to never take concern for tomorrow.

[disneysteve]

It must be nice to never take concern for tomorrow.

I've often wondered what exactly goes through someone's head when they are buying stuff they know they can't afford, when they whip out the credit card at the register knowing full well that they don't have enough money to pay the bill. I just don't get it and never will, thankfully.

[scfr]

Oh NO!!! I really, really, REALLY hope that story is not true.
When will the insanity stop?

[disneysteve]

Your 401(k) Isn't an ATM

Just Put It on My 401(k) Debit Card - 1/14/2008 - insurancenewsnet.com

It is true, scfr. Here are a couple of links to articles about the new ReservePlus accounts.

[cptacek]

But WHY would companies offer that? What advantage is it to them? Is it a recruiting advantage?

I've heard that (some) employers like you to spend money and sink money into houses and cars and such because then you are more dependent on your paycheck. It is easier to retain you if you don't like your job but you have a stack of bills to pay. I would assume that these things would count as 401k loans, and have to be paid back soon after you left your job? If so, and you had borrowed a lot, it may be enough to keep you at your job instead of looking for something else.