Fox News panelists sparred this week over a recent Senate bill aimed at keeping retirement savings from becoming a rainy-day fund. [See Senate bill would restrict 401(k) loans]
With about a third of savers borrowing from their plans, retirement clearly has taken a back seat. No, the 401(k) wasn't designed to be a penny jar for cash-strapped days, but it's also not untouchable. That's why it's so appealing.
So when a bill to limit the number of loans from 401(k)s got introduced, it became, according to some panelists, another attempt at compromising our freedom and telling us we're incapable of protecting ourselves or our retirement.
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But even with this latest attempt at reforming another market, I doubt the government is trying to tell us what to do with our money. The proposed law is simply designed to make it easier to get back on track with retirement planning, encourage continued contributions, and deter too many raids on tax-deferred savings. If it were meant to be invasive, the feds could have targeted something they could actually make money on; something that would incur more penalties, rather than prevent them.
I'm not also convinced by Wayne Rogers' argument that we have every right to our put-away money, to spend or save it however we choose because we've earned it, and that the government's attempt to limit plan loans is another insidious effort to "get into our business."
Because while we may have earned our 401(k) money, we've also wittingly put it away. As investors, we're not ignorant to the risks and restrictions of these types of plans. And if your appetite for risk has been soured by this latest downturn, consider even the most conservative of investments is still a commitment to your financial longevity.
Regardless, Rogers insists if savers want to go to Vegas and gamble their investment away, they have every right to do it. While that might sound tempting, a Vegas bender on my retirement dime just isn't likely, because my 401(k) money really isn't "my" money anymore – at least not today, and not unless it's used for something a little more necessary than craps chips.
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