When the House of Representatives holds a hearing on the merits of 401(k) debit cards, and even Arthur Levitt, the former chairman of the
The main argument in favor of permitting such access to ones hallowed retirement savings is that studies have shown it prompts lower-income and younger investors to save. And, according to
In addition, debit cards linked to defined contribution plans typically give people up to five years to pay back the money, whereas traditional 401(k) loans must be repaid in 90 days in the event a person is laid off or leaves a company.
The industry, understandably, is against 401(k) debit cards, as they go against the very principal of long-term savings, and some fear that they could further exacerbate the current credit crisis, much like home equity loans have.
We absolutely hate it, Jean Stezfand, director of financial security at