Originally Posted by DHK
I'm not the best student of history... but I wonder what would've happened if Harvey happened in the 60's - before 401(k) plans? (They were introduced with ERISA
in the early 70's, if I remember correctly.)
It's not like pensions are liquid.
Most people had money in the bank or under the mattress. Savings wasn't just a catchy phrase.
As a banker, you should have seen that your Depression Era clients generally kept much more liquid or near liquid savings than any other group.
If we are going to go all negative here, let's lay it all out. If it wasn't for legislation and IRS rules restricted access to 401ks and IRAs, most people wouldn't have even the small balance they do.
I will never forget the agent I worked with at Mass when I first started. His father was the branch manager. We were having lunch with a prospect and when the guy brought up savings and liquidity, he just said he'd borrow from his home equity. This was back in 2009 or so.
When life goes bad, banks are not going to be standing in line to loan you money, having some savings is a good thing.
The IRS restricting access to retirement savings is a good thing, and loosening access after a major disaster is also a good thing.