How hard could loan defaults hit your plan?
Use our Loan Loss Estimator and find out now.
The numbers don't lie:
Research shows that 86%
of participants default on
their loans post-separation.
Research shows that 86%
of participants default on
their loans post-separation.
See the impact of loan defaults in 3 easy steps.
We'll help you estimate the impact of involuntary loan defaults on your participants' retirement readiness—and assess your associated fiduciary risk.
Based on your latest Form 5500, we're showing plan assets, total participants, and plan assets in outstanding loans. If you have more up-to-date information for any of these, please enter it.
If you know the number of participants with a loan outstanding, please enter that as well. This will allow the Estimator to calculate the average loan balance per borrower to generate a plan-specific estimate of the impact on the individual. Either way, the plan-level impact will be customized for your plan. Click "Next" when you're ready.
$0
Analysis for
- $0.0
-
$0.0$0.0$0.0$0.0$0.0
Plan-level lost retirement security
$0.0
AnnuallyPlan-level lost retirement security
$0.0
Over 10 years4Average loss per defaulting borrower
$294.8k
Industry average2$0.0 = ˜10% of outstanding loans will default annually1
$0.0 = ˜1⁄3 of those are due to involuntary terminations1
$0.0 = 2⁄3 of involuntarily defaulting borrowers cash-out their balance entirely2
$0.0 = Defaulting borrowers may pay a 25% tax
$0.0 = Defaulting borrowers may be subject to a 10% withdrawal penalty
$0.0 = The biggest factor is lost earnings from the 401(k) leakage3
- Pension Research Council, Borrowing from the Future: 401(k) Plan Loans and Loan Defaults, 2015.
- Deloitte, "Loan leakage: How can we keep loan defaults from draining $2.5 trillion from America's 401(k) accounts?", 2018.
- Assumes 6% growth over 25-year investment horizon foregone as a result of loan default and cash-out
- Assumes 3.5% annual growth in loan assets to account for inflation and participant growth