US retirement account loan limits remain unchanged since 1982

The maximum amount individuals can borrow from their retirement accounts, such as 401(k) plans, in the United States has remained capped at $50,000 or half of the vested balance since 1982. This limit was established during the Reagan administration and has not been adjusted for inflation.

Since the cap was set, inflation has reduced the purchasing power of $50,000 by approximately 70%. While the S&P 500 has grown significantly, the credit available to workers for major expenses like home down payments has effectively shrunk. Although the CARES Act temporarily raised this limit to $100,000 during the COVID-19 pandemic, the original restrictions were largely reinstated, with the SECURE 2.0 Act only allowing higher limits for victims of federally declared disasters.