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. . . .
