Americans are taking “hardship” withdrawals from 40(k) plans.
The Internal Revenue Service allows hardship withdrawal from retirement funds without penalty when there is an immediate or heavy financial need. Investment firm Vanguard has reported that a higher percentage of Americans are now making hardship withdrawals from their 401(k)s.
Since they began tracking in 2004, Vanguard says that what might appear to be a small number, 0.5 percent of workers, is the highest they have seen. An estimated 25,000 retirement investors have tapped into their funds.
“It’s always a concern when you see participants in [retirement] plans pulling money out to address financial hardship,” said Dave Stinnett, Vanguard’s head of strategic retirement consulting. “The market has been down significantly for most of the year, and there’s an inflationary spike that is concerning.”
Vanguard data also shows that record numbers of savers are accessing their nest eggs.
As the Lord Leads, Pray with Us…
- For Acting Commissioner Douglas O’Donnell as he oversees the IRS.
- For the president and his administration as they implement their economic agenda.
- For Americans who need to withdraw funds from their retirement plans to make ends meet.
Sources: CNBC, CBS News
