Americans are borrowing huge amounts of money from their 401(k) retirement plans — and then having big trouble paying off their debt, according to a new study.
Defaults on 401(k) loans have totaled as much as $37 billion a year in recent years, far higher than previously estimated, according to the analysis Monday by two researchers.
The default rate hit 17.4% in the 12 months through May. That's down slightly from the 19.8% peak in mid-2010, but up dramatically from 9.7% in mid-2008, before the global financial crisis.
The study was written by Robert Litan, a researcher at the Ewing Marion Kauffman Foundation and the Brookings Institution, and Hal Singer, a managing director at Navigant Economics.