News: Senate looks to ban 401(k) debit cards

Two legislators want to rid the nation of what they view as a particularly insidious product: debit cards linked to 401(k) accounts.

Two legislators want to rid the world of what they view as a particularly insidious product: a debit card linked to a 401(k) account. "These debit cards allow a participant to use his or her retirement savings to make everyday purchases, like buying a cup of coffee. Clearly that's not what the 401(k) is for," says Senator Chuck Schumer (D-New York), who is co-sponsoring the bill with Senator Herb Kohl (D-Wisconsin). Schumer claims that for every $1,000 an investor pulls from a 401(k) plan, he or she loses $10,000 in retirement income. Schumer introduced similar legislation in 1996, which was enough to spook Bank One into dropping plans for its 401(k)-linked debit card. However, now that the concept has been revived, Schumer says he'll see that the bill becomes law "no matter what" this time.

Related Videos
David Zetter gives expert advice
David Zetter gives expert advice
Joel Greenwald, MD, CFP
Ben Johnston gives expert advice
Ben Johnston gives expert advice
Ben Johnston gives expert advice
Ben Johnston gives expert advice
Ben Johnston gives expert advice
Syed Night
Ben Johnston gives expert advice
© 2023 MJH Life Sciences

All rights reserved.