Excerpt: Given the significant downsides to 401(k)-type loans, why do people take them? Families take these loans because they are either uninsured or underinsured for the risks they face. Over the past few years, families looked for new ways to bridge the gap between slow income growth and rapidly rising prices, especially for houses, but also for food, energy, and health care. This search more often than not led them to household credit, but as families amassed ever-larger amounts of household debt they sometimes also sought out additional financial resources, such as their retirement plans.  MORE >>