Episode Details

Record Number of Americans Tap Retirement Accounts for Hardship Withdrawals in 2022

In 2022, a significant increase in Americans accessing their 401(k) retirement accounts through hardship withdrawals was reported, with 6% of participants in Vanguards plans taking out funds compared to 4.8% in 2021. This surge followed simplified access changes in 2018 and was driven by factors like easier access and automatic enrollments, particularly for lower-income workers. The average withdrawal amount was around $1900, serving as a crucial safety net during challenging times. Despite the rise in hardship withdrawals, overall 401(k) balances grew by 13% due to strong markets, with nearly half of participants increasing their contributions.

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