Rising Number of Americans Dip into Retirement Savings Amid Balance Decline

More Americans are tapping into their retirement savings early to cover immediate expenses, even as their 401(k) balances decline. Fidelity Investments' analysis shows that 2.3% of workers withdrew funds from their retirement accounts for hardship in the third quarter, up from 1.8% last year. Additionally, 3.2% took in-service withdrawals, and 2.8% took out loans from their 401(k). The top reasons for these withdrawals were avoiding foreclosure or eviction and medical expenses. The rising cost of living and inflation are causing financial stress for many Americans, with 57% unable to afford a $1,000 emergency expense. While the number of withdrawals and loans remains relatively small, it highlights the need for better access to emergency savings options.