President Donald Trump told reporters flying on Air Force One that he does not like the idea of allowing Americans to use 401(k) plan assets for cash down payments on homes in exchange for securitizing a portion of the home's equity within the retirement account.
The concept emerged last week, when Kevin Hassett, director of the National Economic Council, spoke Friday with Fox Business' Maria Bartiromo.
"We've got a whole bunch of policies that are going to help people [become homeowners]," Hassett said. "The one you didn't mention that we're also talking about, and the president will put the final plan out in Davos next week, I'll be flying up there with him, is that we're going to allow people to take money out of their 401(k)s and use that for a down payment."
Responding to a question from Bartiromo about such a policy potentially weakening Americans' retirement readiness, Hassett floated exchanging 401(k) assets used for a down payment for a part of the home's equity.
"Suppose that you put 10% down on a home, and then you take 10% of the equity of the home and put it in as an asset in your 401(k)," he said. "Then your 401(k) will grow over time."
Trump's apparent disapproval of the idea came to light late Thursday during his return flight from the Davos Economic Forum in Switzerland. Jennifer Jacobs, a senior White House reporter for CBS News, reported the president's position via the social media platform X.
According to Jacobs' post, Trump "dumped on" his administration's proposal to allow people to use their 401(k) for a mortgage down payment, reportedly saying he is "not a huge fan" the concept.
The president voiced concern about interfering with the success of 401(k) plans, Jacobs said, echoing skepticism that was shared with ThinkAdvisor this week by leading retirement planning experts.
"I like keeping their [401(k)s] in great shape," Jacobs quoted. "I like keeping their 401(k)s. And I'm not a huge fan of that, putting down a deposit."
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