Hardship withdrawals allow workers to tap their 401(k) for an 'immediate and heavy financial need'
A record-breaking number of Americans are making emergency withdrawals from their 401 retirement plans in order to cover a financial hardship amid the ongoing inflation crisis, according to new data from Vanguard Group. Nearly 3.6% of workers participating in employer-sponsored 401 plans made a so-called "hardship" withdrawal in 2023, according to Vanguard, which tracks about 5 million accounts. That marks a major increase from the 2.
About 40% of individuals who dipped into their 401 last year did so to avoid foreclosure — up from about 36% in 2022, according to the report. The Labor Department on Tuesday reported that the consumer price index, a broad measure of the price of everyday goods including gasoline, groceries and rent, rose 0.4% in February from the previous month. Prices climbed 3.2% from the same time last year. Both of those figures came in higher than the 0.3% monthly increase and 3.
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