Record number of Americans tapping 401(k) for financial emergencies, caution advised against early withdrawals

From Wall Street Journal: 2025-03-05 09:00:00

A record number of Americans are dipping into their 401(k) accounts for financial emergencies, with 4.8% taking early withdrawals last year. This is up from the previous record of 3.6% in 2023 and the prepandemic average of 2%. Vanguard Group, which administers 401(k)-type accounts for nearly five million people, reported the increase. Some reasons for withdrawals include preventing foreclosure and paying medical bills. Financial experts caution against tapping into retirement funds early, as it can have long-term consequences on savings and retirement security.



Read more at Wall Street Journal: 401(k) Hardship Withdrawals Hit Record: Foreclosures, Home Repairs Drive Americans to Tap Retirement Savings