Core Insights - The research indicates that 401(k) loans are primarily used for essential needs, particularly medical and housing expenses, rather than for discretionary spending [1][5]. Group 1: Research Findings - The study conducted by the Employee Benefit Research Institute and J.P. Morgan Asset Management analyzed the spending behavior of private-sector 401(k) participants, revealing that healthcare and housing are the main reasons for borrowing [2]. - Nearly half (47.6%) of households that took a loan experienced a healthcare spending increase of over 10% that year, with healthcare being the only category where spending rose significantly for borrowers compared to non-borrowers [3]. - There is a notable correlation between taking a plan loan and starting mortgage payments, with 12.5% of households making mortgage payments having taken a loan compared to 9.6% who did not [4]. Group 2: Implications of Findings - Researchers argue that restricting access to 401(k) loans could worsen financial security, as participants may resort to outside loans with less favorable terms, leading to greater long-term financial harm [5]. - Financial advisors express concerns about treating 401(k) accounts as general savings, warning of potential tax implications and performance drag due to opportunity costs associated with loans [6][8].