More Americans Tapping Into Retirement Savings as ‘Hardship’ Withdrawals Rise

A significant jump in the number of Americans yanking money out of their 401(k) accounts to pay bills and buy necessities is the latest sign that the U.S. consumer is experiencing increasing levels of financial strain. A new report from Fidelity, the nation’s largest provider of 401(k) plans, reveals a troubling trend—Americans are increasingly tapping their retirement savings in the form of hardship withdrawals and loans. The report shows that 2.3 percent of U.S. retirement plan participants took a hardship withdrawal in the third quarter of 2023, up from 1.8 percent in the third quarter of 2022. Top reasons given for taking a hardship withdrawal were avoiding foreclosure or eviction and covering medical expenses....