Americans Boost 401(k) Hardship Withdrawals to Record 6% as Housing and Medical Costs Bite
Updated
Updated · Bloomberg · Jun 16
Americans Boost 401(k) Hardship Withdrawals to Record 6% as Housing and Medical Costs Bite
2 articles · Updated · Bloomberg · Jun 16
Summary
A record 6% of nearly 5 million Vanguard 401(k) participants made hardship withdrawals in 2025, up from 5% a year earlier.
Rising housing, healthcare and education costs drove the increase even though tapping retirement accounts can trigger taxes and penalties.
About two-thirds of the withdrawn funds went to urgent needs: 36% to avoid foreclosure or eviction and 31% to cover medical expenses.
The data from Vanguard’s annual How America Saves report underscores growing financial strain pushing Americans to use retirement savings as emergency cash.