IX. Results
S. outlined share preparations. DC advancing years accounts symbolizing an ever-increasing fraction folks family wealth are being used by employees to each other money dated-many years retirement security, and let security most recent use demands. The program loan element is one of the common but really understudied pre-advancing years liquidity top features of 401(k) arrangements.
This paper features searched the effects out-of boss plan mortgage policy, therefore we stop financing framework can and has an enthusiastic financially important effect on participant borrowing. In our dataset, one-5th out-of package users got that loan at one time, if you find yourself nearly forty per cent performed so more than a great four-season months. Members who lent a lot more was in fact along with apt to be young and liquidity-limited, in keeping with a beneficial lifecycle model of preserving and you can borrowing. Yet , conditional on borrowing from the bank, it had been high money/wide range users whom borrowed huge portions of the 401(k) levels.
Over twenty years in the past, Nobel Award champion Franco Modigliani patented a strategy having issuing 401(k) credit cards with the objective of creating it more convenient for workers so you’re able to withdraw from their senior years accounts to fund quick-label usage requires (Vise, 2004)
Employer-determined package loan policy as well as had a content influence on credit conclusion. When a plan allowed teams to obtain numerous finance, they were prone to obtain. Personal funds was indeed also less, effective out-of a barrier-stock design so you can controlling borrowing like that included in credit notes. Celý příspěvek