Americans Drain 401(k)s as Average Balances Fall 4% to $141,000
Updated
Updated · Realtor.com News · Jun 1
Americans Drain 401(k)s as Average Balances Fall 4% to $141,000
3 articles · Updated · Realtor.com News · Jun 1
Fidelity data showed the average 401(k) balance dropped 4% to $141,000 at the start of 2026, while the average IRA balance fell 4% to $131,380 in the first quarter.
6% of Vanguard 401(k) participants made hardship withdrawals in 2025, up from 5% in 2024 and 3.6% in 2023, with rent or mortgage payments the most common reason.
3.8% inflation and market volatility tied to the Iran war are squeezing households, making retirement accounts look like a source of emergency cash.
A hardship withdrawal can cover foreclosure or eviction risk, but experts say it should be a last resort because taxes apply and most savers under 59.5 also face a 10% penalty.
Advisers urged borrowers to seek forbearance, loan modification, refinancing, personal loans or home-equity borrowing before tapping retirement savings meant for long-term security.