Easy Money - Health And 401(K) Loans
Rising health care costs and declining personal savings rates are nearly synonymous with household medical debt. For some, Defined Contribution (DC) retirement savings plans provide a ready source of funds to meet these medical debts. The authors examine whether health status and health insurance coverage predict the likelihood of having a DC loan using data from the Federal Reserve's triennial Survey of Consumer Finances from 1989 to 2007. They find that poor health raises the likelihood that a household will borrow from their DC plans, even controlling for other forms of debt, access to credit, and whether households are covered by health insurance.