More retirement savers are borrowing from their 401(k) plan. Those are ‘leading indicators of economic stress,’ expert says

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.
You too huh.

It's ok, 8 people get to live like gods so it's allllll worth it

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.

How does that even work? Was the '23 assessor drunk?
- You’d be surprised how much “market value” has nothing to do with worth.
- 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.
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.
- I think they're saying that these "nice things" are purchased with more debt.
- 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.

I'll soon have 30 years of employment at the same company. I've always heavily contributed to my 401k, never took a loan. The past 5 or 6 years it's generated more in interest than I make with overtime.

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