401(k) Hardship Withdrawals Rise to 3% as Average Balances Hit Record $155,800
Updated
Updated · CNBC · Sep 3
401(k) Hardship Withdrawals Rise to 3% as Average Balances Hit Record $155,800
1 articles · Updated · CNBC · Sep 3
Summary
3% of workers took hardship withdrawals from 401(k)s in the second quarter, up from 2.6% a year earlier, even as retirement balances rebounded to records.
$155,800 was the average 401(k) balance, up 13.1% year over year, while IRA balances rose 10% to $144,523 as market gains and a steady 14.4% total contribution rate lifted accounts.
19.5% of workers had an outstanding 401(k) loan and 2.8% took a new loan in the quarter, pointing to continued cash strain despite stronger portfolios.
Higher costs for housing, utilities, groceries and transportation are squeezing households, and advisers warned that repeated 401(k) borrowing or withdrawals can erode long-term retirement savings.