I worked on 401(k) plans and I believe the reason loans are available is to encourage people to save, but still have some of the money available just in case. Take away the availability of funds, other than hardship withdrawals, and people may stop stop contributing. More unintended consequences of government trying to "protect" people.

By the way I withdrew a decent amount of money from my 401(k) when I was younger so it's not like I'm any smarter than anyone else. Live and learn.

Sounds like the fiscal equivalent of fighting to prevent McDonalds from including toys in Happy Meals... They understand people are making choices, but believe that people should be led to the "right" choice.

How long before "you can't withdraw from your 401k because you will need it later", becomes "You can't dip into your 401K because we need it now"..

The name "SEAL Act" sounds like a program to encourage people to buy fur coats...

Sounds like they want to create a new investment instrument. Let them go ahead and do it - and let people choose.

Ah yes, Schumer. The "we must limit your freedom because you might abuse it" Senator.

I took a loan from my 401K once for a vacation. Had we not had the money, my mother-in-law might never have seen my youngest daughter. That's probably worth the few thousand dollars it might have cost me in foregone earnings.

The alternative would have been to find some other source of a loan, and temporarily suspend my 401K contributions until the loan was repaid.

Chuck the Schmuck, dipstick extraordinaire, at your service.

Ah, yes, it's far better to miss mortgage payments or go into debt from an emergency than dip into one's own retirement account! Thanks for looking out for us, Senators!

NO one has any damn business what's in MY 401k except ME.

Asshat senators.

I hate 'em all.

o.O

When the company I worked for folded, I drained my 401(k) (13 grand, big deal) to start my company.

Ten years on, that was the smartest thing I've ever done with money.

If this gets serious traction, then I'm draining my SEP, and going for the mattress method of saving for retirement. Because the only reason they'd consider doing this is as a prelude to draining all 401(k)-style retirement accounts for their use and giving us an "annuity" plan in return (which has been floated a few times by Obama insiders).

Both of my sons were laid off, one of them permanently. They both used their 401Ks to find affordable housing and pay their bills. It's their money, anything that makes it harder to get at is wrong.

Some years ago I had to borrow from my 401k after I had to sell my house at a loss. That sucked, but I've long since paid it back, and I avoided having to let the bank repo the house, which would obviously have destroyed my credit.

Why do I suspect that the real motivation for this law is that there's a 401k asset tax plan in the works, and the government wants to prevent people from being able to withdraw from 401k's for tax advantage? Don't forget, there was no specific law that created the 401k; it was the result of an Tax Court case. The Tax Court could very well change its mind.

Ah, the S[t]EAL Act. You should not use that money, even as collateral for a loan, because it should be left for government[s] to take.

When the 401k, and then Roth IRA, came out I was eligble and actually thought about it - for maybe two minutes. I quickly noted that I could not take out money without fairly large penalties. And leaving it in might mean it escaped income tax now, but would be subject to taxation upon maturity. Knowing that when the Federal income tax was being discussed in Congress one congresscritter argued that `Who knows, this one percent tax might go as high as five percent in the future` I figured I might as well pay now - and invest what was left in triple-tax-free bonds.