Americans Struggle with Expenses and Savings, Turning to 401(k) Withdrawals

More Americans are resorting to hardship withdrawals from their 401(k) accounts to cover emergency expenses, such as medical bills or to prevent foreclosure. Reports from Fidelity Investments and Vanguard show a significant increase in hardship withdrawals in recent years. However, financial planners caution against this move as it comes with tax penalties and missed investment growth. The rise in hardship withdrawals is attributed to a combination of factors, including rising prices, high interest rates, and a decrease in savings rates. Experts recommend building emergency savings and exploring alternatives like borrowing against a 401(k) before resorting to hardship withdrawals.