CBNC Nov 28: "401(k) balances are down, and ‘last resort’ hardship withdrawals are up"

Old news (from August) showed rising hardship withdrawals:

401(k) hardship withdrawals are on the rise.

Fidelity found . . . the share who took out hardship withdrawals, which reached 1.7% in the latest quarter. . . .

according to Bank of America’s recent participant pulse report. Roughly 15,950 retirement savers withdrew money from a 401(k) plan to cover a financial hardship in the second quarter, up 36% year over year.

Vanguard’s report found that 401(k) hardship withdrawals hit a record high last year. Nearly 3% of workers participating in a 401(k) plan took a hardship distribution in 2022,

As of last week the trend was continuing

401(k) balances are down, and ‘last resort’ hardship withdrawals are up

TUE, NOV 28 2023

The average 401(k) balance fell 4% to $107,700 in the third quarter . . .

The average individual retirement account balance was also down nearly 4%, to $109,600 from $113,800, in the second quarter of 2023. . . .

The share of participants who tap such hardship withdrawals is on the rise, according to reports by Fidelity Investments and Bank of America — largely to avoid a foreclosure or eviction or to cover medical expenses, Fidelity found.

Bank of America’s recent participant pulse report showed that the number of 401(k) plan participants taking hardship withdrawals was up 13% from the second quarter and 27% compared with the first quarter of the year — with the average withdrawal amount just over $5,000. . . .

Ya know, it’s like when a car that used to drive 120mph whisper quiet,
now has a top speed of 60 mph and it smokes and makes a banging noise.

Yes it is still running, (No, the economy is not in recession)

But something bad happened
Head-in-the-sand and hoping it goes away is probably not a good way to deal with it.

The market will be up and the gas prices will drop for the election. Dems are not stupid. But if dems win gas will got through the roof.

I think you give them too much credit.

There is a lot of this (below) going on in the economy:

Jobs

Net Worth

Federal Tax receipts

It’s really like a football team that just lost 8 in a row.
It no longer makes sense to say
“We are doing everything right. If you count last season we are 16-and-8”

That’s when you start hoping that someone hits you and you get to collect a nice insurance settlement.

Kind of sad when the new American Dream is either hitting the lottery or winning a lawsuit. But that’s what we’ve become, in many respects.

It doesn’t escape me that either “dream” starts with “L”.

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