Americans' retirement accounts are looking both stronger and, in the case of a few, more strained. Vanguard says 6% of workers in its 401(k) plans tapped their savings for hardship reasons last year—the highest share on record and up from a pre-pandemic norm of about 2%. The Wall Street Journal sees it as a sign of rising financial stress, noting most pulled money to stave off foreclosure or eviction or to cover medical bills, with a typical withdrawal of $1,900.
The jump marks the sixth straight annual increase and comes as Congress has eased withdrawal rules, allowing a small penalty-free emergency pull once every three years, and expanded qualifying reasons, including domestic abuse, disasters, and now, long-term care insurance, per CNBC. Yet balances are also at a record average of nearly $168,000, more workers are being auto-enrolled, and a record high 45% of participants increased their savings rate in 2025—leaving more people with a cushion they can raid when finances crack.