A record number of Americans are dipping into their retirement savings accounts for financial emergencies amid ongoing high inflation.
Hardship withdrawal activity from 401 accounts increased in 2023, going from 2.8% of people in 2022 who initiated a hardship withdrawal to 3.6% of participants last year, according to the Vanguard Group, which tracks about 5 million accounts. Vanguard noted how the hardship withdrawal increase could signal "financial stress" among more households.
"And for a small subset of workers facing financial stress, hardship withdrawals may serve as a safety net that otherwise may not have been available without plan-implemented automatic solutions," the group added.These types of withdrawals come with a cost, too. Those who make 401 hardship withdrawals owe income tax on the money and could be hit with a 10% early withdrawal fee if they are under the age of 59½.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
More Americans Are Treating Their 401(k)s Like Cash MachinesThe 401(k) is doing double duty as both a retirement account and a source of emergency funds for more Americans. A record share of 401(k) account h...
Read more »
Here's how much money Americans in their 30s have in their 401(k)sAmericans in their 30s are around halfway to retirement age, but many don’t have much saved in their 401(k)s.
Read more »
401(k) 'hardship' withdrawals surge to another record as high inflation stingsHardship withdrawals allow workers to tap their 401(k) for an 'immediate and heavy financial need'
Read more »
Nolte: Record Number Plunder Their 401(k)s in Biden’s AmericaSource of breaking news and analysis, insightful commentary and original reporting, curated and written specifically for the new generation of independent and conservative thinkers.
Read more »
401(k)s vs pension plans: What's the difference?Pension plans and 401(k) plans can both help workers during their retirement years. While once commonplace, pensions have largely been replaced by 401(k)s in the private sector.
Read more »
US drops in ranking of happiest countries, dragged down by less satisfied young peopleAmericans, particularly younger Americans, are less happy, according to a new report from Gallup.
Read more »