As inflation continues to impact consumers, more Americans are resorting to making hardship withdrawals from their 401(k) retirement plans to cover expenses. Bank of America's latest data reveals a growing number of individuals using their retirement savings to address financial emergencies.
Strategic Wealth Partners investment strategist Luke Lloyd on what to expect from the July PPI and discusses 2Q earnings.to cover a financial emergency amid chronically high inflation, according to new data from Bank of America.
About 15,950 workers taking part in employer-sponsored 401 plans made a "hardship" withdrawal during the first three months of 2023, according to Bank of America's analysis of clients' employee benefits programs, which tracks about 4 million accounts. Hardship withdrawals allow workers to tap their 401 for an "immediate and heavy financial need." on the money and could be hit with a 10% early withdrawal fee if they are under the age of 59½.
Someone who takes a hardship withdrawal also cannot pay it back to his 401 and cannot roll that money into another retirement savings account.
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