Workers Increase 401(k) Loans as Average Balances Fall 4% to $141,000

2 articles · Updated · CNBC · May 28

Fidelity said 19.2% of workers had an outstanding 401(k) loan at the end of Q1, up from 18.8% a year earlier, while hardship withdrawals rose to 2.5% from 2.3%.
Average 401(k) balances fell 4% to $141,000 and IRA balances dropped 4% to $131,380 after the Iran war triggered a March market selloff.
That strain hit as households faced higher grocery and gas costs, and Fidelity said repeated hardship withdrawals by some savers point to more precarious finances.
Advisers warned that tapping retirement money during a downturn can lock in losses, trigger taxes and penalties, and weaken long-term compounding.
Most savers still kept contributing: the combined 401(k) savings rate reached a record 14.4%, even as markets later rebounded to fresh highs.

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