Record number of Americans tap 401(k) for hardship withdrawals in 2025
Fox Business • • business
Key Points:
- In 2025, 6% of Vanguard-administered 401(k) participants took hardship withdrawals, up from 4.8% in 2024 and significantly above the prepandemic average of 2%, indicating increased financial stress among workers.
- The increase in hardship withdrawals is partly attributed to easier withdrawal processes following 2018 reforms that removed the loan-first requirement, making it simpler for participants to access funds.
- Leading reasons for hardship withdrawals included avoiding foreclosure, eviction, and covering medical expenses, with a median withdrawal amount of $1,900.
- Despite financial challenges for some, overall 401(k) savings saw positive trends in 2025, including a 13% average account balance increase and
