A growing number of Americans are taking hardship withdrawals from their 401(k) plans, depleting their retirement savings to pay for unexpected medical costs or to keep their homes.
According to a report from the investing company, hardship withdrawals from 401(k) funds at Fidelity Investments have risen in the past five years.
In 2023, 6.9% of plan members withdrew money, up from 2.1% in 2018.
According to Kirsten Hunter Peterson, vice president of thought leadership at Fidelity, it's a big problem, and it's growing problem.
According to Vanguard, the number of hardship withdrawals has increased over the past four years, from 2.1 transactions per 1,000 participants in 2018 to 4.3 in 2022.
According to investing experts, Americans who take out retirement funds to pay for an urgent cost sometimes do so out of desperation.