ATM card linked to your 401k account - insanity

[aida2003]

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.

This is so SAD. Just imagine how many people won't even understand or know about the 401k loan rules. They'll think as just another bank account.grrr....

[kilcher]

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

Well, the obvious answer to me (though not necessarily correct) is that they get a kickback.

[sweeps]

Liz's take

[disneysteve]

Very interesting, sweeps. Maybe it isn't such a bad idea after all. It doesn't make it any easier to get a loan, gives better repayment options and allows you to take just what you need, rather than a flat amount. The interest rate is higher but the upfront fees are lower.

[Taribor]

Very interesting, sweeps. Maybe it isn't such a bad idea after all. It doesn't make it any easier to get a loan, gives better repayment options and allows you to take just what you need, rather than a flat amount. The interest rate is higher but the upfront fees are lower.

My only concern is people thought home equity loans were wonderful too and claimed how responsible they would be....and we know how that turned out.

I picture people lookng at a growing balance of 401(k) and the rationalization building....and building.....and building, until burns a hole in their pocket.

I guess that needs to be tempered with a right to control your own money, but with direct debit, one of the cool things about a 401(k) was the "out of site of mind" aspect that let people set a contribution percentage and for the most part, forget about it. Everything that is done to give easy access to that money, equally threatens that benefit in my opinion.

In the end everyone is adults.....so long as 20 years from now my SS tax doesn't sky rocket to fund everyones retirement who decided their 401(k) was really just another easy access savings account!