Based on 30+ years of plan sponsor experience, I believe negative press about 401(k) loans are aimed at the wrong target. Rather, hardship withdrawals should be in the crosshairs, not loans.
Articles about 401(k) loans tend toward the negative – using terms like “erode” or “raid” when characterizing loans’ effect on employees’ retirement savings. Many recordkeeping/mutual fund firms tend to cast loans in either an ambivalent or negative light, as these tend to remove monies from “assets under management” for fee purposes.
