Americans Struggle with High Inflation: 401(k) Hardship Withdrawals and Loans Surge

The number of Americans making hardship withdrawals from their 401(k) retirement plans is increasing as high inflation continues to impact their finances. Bank of America's data shows a 13% rise in hardship withdrawals from July to September 2023, with individuals withdrawing an average of $5,070. These withdrawals come with income tax obligations and potential early withdrawal fees, but the penalty can be waived for qualified hardships. Americans are also relying on savings and accumulating credit card debt to cover essential expenses. The Federal Reserve is expected to report a record-high credit card debt, raising concerns due to high interest rates.