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B. – 67%
In a recent study from Greenwald & Associates, two-thirds (67 percent) of 401(k) participants say they’d consider contributing more to the plan if their employer were to add loan insurance.
When participants take 401(k) loans, this is typically a time when they are under financial stress and need access to funds. Loan insurance prevents a participant’s loan from defaulting in the event of an involuntary layoff or disability. This preserves their retirement account and the participant avoids paying burdensome taxes and penalties, and even, perhaps, prevents them from cashing out their entire balance.
Participants in the Greenwald study reacted positively to the presence of a loan insurance feature, and felt that with the stress of a loan default removed from their shoulders, they would save more for retirement as a result.
This finding was one of many interesting participant views in the study, entitled “Missing Voices: What 401(k) Borrowers Can Add to the Loan Program Conversation”. To read the full report, click here.
INCORRECT – The correct answer is B. – 67%
In a recent study from Greenwald & Associates, two-thirds (67 percent) of 401(k) participants say they’d consider contributing more to the plan if their employer were to add loan insurance.
When participants take 401(k) loans, this is typically a time when they are under financial stress and need access to funds. Loan insurance prevents a participant’s loan from defaulting in the event of an involuntary layoff or disability. This preserves their retirement account and the participant avoids paying burdensome taxes and penalties, and even, perhaps, prevents them from cashing out their entire balance.
Participants in the Greenwald study reacted positively to the presence of a loan insurance feature, and felt that with the stress of a loan default removed from their shoulders, they would save more for retirement as a result.
This finding was one of many interesting participant views in the study, entitled “Missing Voices: What 401(k) Borrowers Can Add to the Loan Program Conversation”. To read the full report, click here.
