https://www.cnbc.com/2023/12/10/more-americans-take-401k-loans-an-indicator-of-financial-stress.html
Data suggests more Americans are taking loans and for larger amounts. Inflation is a likely contributor, experts said.
What about the ones that can't afford to save for retirement? That sounds like a "leading indicator of economic stress" too.
I was self-employed for 10 years. I was also unemployed for about 5 years. What retirement savings?
I've even burned thru my emergency fund and I keep having more emergencies. I'm doing laundry at the laundromat again for the first time in 25 years.
I’m doing laundry at the laundromat again for the first time in 25 years.
Does this mean your washer or dryer broke, or something more dramatic like you had to drastically downsize your living arrangements and lost access to your own washer and dryer?
Somewhere in the middle. Our living situation was already downsized, only has room for a stacked washer and dryer. Over two years replaced $16k roof, $12k furnace, A/C & ductwork, $19k foundation repair, $8k in car repairs, $6 medical bills.
And yeah our washer is down and we tried and returned a $350 timer that didn't fix it. Control board is no longer made. Talked to several people, it's unrepairable. So do we replace the whole stacked unit? We have some issues with it, would rather go side by side but we'd have to completely redo the laundry room and we have to buy a washer and a dryer either way.
Even with all of those expenses what is killing me is the cost of food right now, three teenagers in the house. At least my car is paid off in a month. Our household income is under $100k.
I still have a detached garage that was destroyed by raccoons that needs completely gutted and redone - ceiling, walls, electrical, new doors. And I haven't been to the dentist in over 20 years, and I may have had a heart attack yesterday.
Yeah my washer broke.
I'm so sorry this all happened to you. I will say the cost of kids is one reason I'm never having them. It's too unaffordable.
One thing I might suggest going forward is look into if you can get a house insurance rider to cover appliance breakdowns. More offer it, and it's a big help caping things at ~ $500 or so, for ~$45 a year on the policy. My coverage would have paid out on the furnace and washer/dryer stack replacement.
My brother in law took out 200k from his 401k to put a down payment on a $1.2mil USD house (in 2023) that sold for 600k in 2019, is currently assessed at $650k, and is surrounded by houses currently for sale under $700k.
His intention was to pay back once he sold his previous house, but he found out nothing the previous owner (of his old house) did had permits, and the entire house (including his own kitchen remodel by an unlicensed contractor ) was not up to code.
So he had to sell the old house “as is” or he wouldn’t be able to pay the first mortgage payment on his new house that’s over $8,000/m.
What a moron.
If you put 200k of your own money in, the assessor is probably like whatever. Try that shit with a VA loan and see how it goes. I couldn't build a 360k house in a neighborhood of 280k homes even though we were looking to build a much nicer home than the other houses - I mean that money was going into valuable upgrades like more square footage and a three car garage and a partially finished walk-out basement. It was on the leading edge of the massive housing price increase and before the interest increase. VA appraiser said we'd have to bring 60k to the table and that's what we'd be underwater. Well to knock 60k from the cost we wouldn't even be upgrading the square footage from our current home. And while I might've considered it, my wife said absolutely not if we were underwater.
Now every house in the neighborhood is like 400-450k. I would've been very happy I made that deal. Anyway now we're stuck in our current house until our kids graduate. We'll see what the market is like then. Can't keep climbing stairs forever.
Oh, I meant I'm not understanding how the value of the new house was halved over the course of this year. OP said his brother paid $1.2MM in 2023, but the house is now valued at $650k. Admittedly I'm a renter and I don't really "get" the housing market, so a house going from $600k to $1.2MM over 4 years makes sense to me, but to halve in under a year seems drastic.
You can go to the county assessor website and view the sales history of every property. I could see that in 2019 homeowner Paid an amount nearly half of what they sold for. I’m sure you noticed a dramatic increase in rent between 2019 and 2023. Do you think these apartments are suddenly worth more? The answer is no, and the same goes for housing. Housing prices have increased dramatically for various reasons that are unimportant for this conversation. The problem is, those housing prices aren’t real. It’s just what people will pay.
Really what I’m trying to get at is that he paid nearly double for a home in an area with similar homes that are currently going for significantly less because he’s an idiot. Another humorous detail is that he used the same realtor he used to buy his first house, a house that did not get an inspection, needed a roof replacement, and had a crumbling foundation. 
Holy shit. Thank you, now I get it. He just made one HELL of a bad deal. I read your update; your brother's wife should probably take away his checkbook 🤣
Their partner is even worse. Apparently they spend all their money each month. They have a great job, so idk how they do it. They absolutely refuse advice. I swear, if I told both of them how to breath, they would stop out of pridespite.
My coworker did this too though not at such an extreme level. Instead of saving cash like I did with an equivalent income and family makeup, he decided to take a 401k loan for a down-payment on a house. This would be fine except he acts like he's a financial genius and belittles others for doing it without taking out loans to pay for other loans. This same guy was recently talking about cashing out the rest of his 401k because of the recent market downturn and called me an idiot for increasing my contribution amount. I guess he lives by the "buy high, sell low" mantra.
It could just be an indication of the stupidly high housing prices right now. I bet most people borrowing from their 401(k)s are using it for a down payment.
That's why I borrowed from my 401k 8 years ago. I only have $70k in my 401k now. I didn't borrow that much, but I'm 57. I was a terrible saver.
I’m 40 with a couple grand and had to stop a year ago. Money was/is too tight. Better off than me. I will probably go like my FiL, a heart attack at work at 70yo.
I am nearing ( < 10 years) a planned retirement and because of the articles I read/click on I end up seeing lots of stories like this.
I see both extremes, "I'm 55 and have 4 million in my 401k, can I retire?" as well as medium 401k by age showing like 55yo with 80k in retirement savings.
I get more stories talking about or showing how bad average Americans are doing from a savings/living perspective. Yet, I see new cars and big ass houses everywhere. Big ass GMC and Cadillac Denali SUVs, Tesla's, all manor if expensive vehicles and fancy new houses. Everyone has the latest iPhone, etc..
I guess debt is a helluva thing.
So you see a Tesla driving down the road and suddenly everyone is doing fine?
Some people are doing better than others. A lot of the shitboxes of people who aren't doing fine are driving aren't anywhere near as noticeable.
Ah, so instead of "Some people are doing fine, thus everyone is doing fine" it's "some people have poor money management skills, thus everyone has poor money management skills".
Either way it's a pointless generalization based on personal bias.
Not "a" Tesla,
I'm saying I'm driving around in one of two paid off vehicles (wife's or mine) the newest is 2011.
Whenever we go anywhere, generally most other cars are newer/nicer.
I see a ton of Teslas. I see a ton of Denali's I see a ton of Mercedes SUVs
Just saw a Lucid Air driving today.
So if everyone is doing so terrible, who owns all these cars?
I'm NOT saying Americans are not doing terrible... But externally people seem to be able to buy new vehicles,. Houses are easier to be bias since those are where you are physically, but there's no shortage of big new houses being built. I'm just always amazed at the difference in what I HEAR and what I SEE. Around me. I live in a semi rural area in Indiana.
If you havent been taking 100% of your 401k to gamble in short term S&P options these last 3 years then you are a chump