Bloomberg: Early Tap of 401(k) Replaces Homes as American Piggy Bank

Premature withdrawals from retirement accounts have become America’s new piggy bank, cracked open in record amounts during lean times by people like Cindy Cromie, who needed the money to rent a U-Haul and start a new life.

Her employer, the University of Pittsburgh Medical Center, had outsourced Cromie’s medical transcription work. Cromie said the move cut her income by as much as 60 percent, at times leaving her with minimum-wage pay.

So, last year, at age 56, she moved about 90 miles from her home in Edinboro, Pennsylvania, into her mother’s basement. To make ends meet as she moved and then quit the job, Cromie pulled out $2,767 from her retirement savings.

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Welcome to White-Collar Crime, 2039

Financial fraud in 25 years: A virtual Madoff by Scott Cohn | @ScottCohnCNBC

For just about as long as there has been money, people have found ways to steal it. And as sure as there will be money 25 years from now—at least in some form—white-collar crooks will still be plying their trade. But new technologies could create a world where, as one former law-enforcement official warns, “the sky’s the limit in terms of what fraud you can commit.”

Experts say the crimes themselves never change much. From basic frauds and Ponzi schemes to complex security breaches, money laundering and tax avoidance, there are only so many ways a crook can make a buck. When CNBC launched in 1989, junk bond king Michael Milken was defending himself against securities fraud charges in a sweeping insider-trading investigation. Twenty-five years later another Wall Street insider-trading crackdown—this one focusing on hedge funds—has ensnared 79 people and counting.

Now consider a world where an inside trader can get his information not from a human source inside a company but from an outside hacker who steals the data from the company’s database in the cloud. He passes the information along through a series of hopelessly encrypted, undetectable instant messages. The illicit trade is completed in nanoseconds. The profits are collected in virtual currency. And the criminals live to trade—and steal—another day.

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