Wow, I found this shocking:
"Borrowing from retirement plans is surging.
At the end of last
year, 18% of workers had loans outstanding from their plans, up from
11% in 2006, according to a survey of 2,011 full-time employees
released in February by the Transamerica Center for Retirement Studies,
a nonprofit corporation funded by Aegon NV’s Transamerica Life
With home prices falling nationwide, the loans may be a
sign that cash-strapped consumers are raiding their nest eggs to stay
afloat, no longer able to tap their houses for cash and up against
their credit-card limits . . .
Last year, 52% of workers with annual incomes of $50,000 to $100,000
said they planned to rely primarily on 401(k) plans and IRAs to pay for
living expenses in retirement, up from 46% in 2006, according to the
Transamerica survey. The percentage counting on Social Security also
increased, to 19% from 13%, while those counting on a company-funded
pension plan dropped to 11% from 18%."
Sounds bullish to me . . .
Raiding the 401(k) Nest Egg
WSJ, May 5, 2008; Page R1
– Stephen Roach, chairman of Morgan Stanley’s Asia division, talks with Bloomberg’s Deirdre Bolton about today’s report on U.S. economic growth, the implications of a weaker U.S. dollar and the outlook for economies in Asia and a recovery in the U.S. The Commerce Department said the U.S. economy expanded at a 0.6 percent annual pace in the first quarter, reflecting an increase in inventories as consumers retrenched and companies cut investment. (Source: Bloomberg)
Roach Sees Negative Growth in U.S. for Second Quarter
Bloomberg, April 30 2008