{
  "id": "R40828",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R40828",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 375546,
      "date": "2009-09-22",
      "retrieved": "2016-04-07T02:16:08.838356",
      "title": "An Analysis of Borrowing From Defined Contribution Retirement Plans",
      "summary": "Americans are being given more responsibility for saving for their own retirements. Over the past 25 years, fewer households have been covered by traditional defined benefit (DB) retirement plans, in which retirees receive monthly checks based on a formula using some combination of earnings history and employment tenure. In place of DB plans, more and more employees are being covered by defined contribution (DC) plans, in which employees (and often their employers) place funds in individual employee accounts that are used as the basis for retirement incomes.\nA feature of many DC plans is the ability to access the funds prior to retirement, either by making withdrawals or through borrowing from the account. If participants have the choice, borrowing is usually the better option. In fact, borrowing from a DC account is frequently less costly than other sources of credit, such as credit cards or installment credit. Although borrowing from DC plans has certain advantages, significant disadvantages exist. Most personal finance advice warns against borrowing from retirement plans as it may endanger individuals\u2019 long-term retirement income security.\nThis report examines the issue of accessing funds from DC plans, with a specific focus on borrowing from DC plans. The topics include a discussion of the relevant laws and regulations of making withdrawals and borrowing from retirement plans; a discussion of the advantages and disadvantages of borrowing from DC plans; a comparison of the characteristics of households that have outstanding loans with households that do not have outstanding DC plan loans; and a discussion of some relevant policy issues.\nThe data used in this report indicate that in 2001, 2004, and 2007, about 15.0% of households that could borrow had outstanding loans. Among those households that had outstanding loans, it appears that most households borrowed because of poor financial conditions or because of a lack of other sources of credit. Households that appear to make better informed financial decisions (such as greater shopping for credit and having an Individual Retirement Account, or IRA) are less likely to have outstanding DC plan loans.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
      "formats": [
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          "format": "HTML",
          "encoding": "utf-8",
          "url": "http://www.crs.gov/Reports/R40828",
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          "filename": "files/20090922_R40828_b2015aae2131dfcd475709dea77eb0bfd0ffd532.html",
          "images": null
        },
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          "url": "http://www.crs.gov/Reports/pdf/R40828",
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          "images": null
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      ],
      "topics": []
    }
  ],
  "topics": [
    "Domestic Social Policy",
    "Economic Policy"
  ]
}