401(k) Hardship Withdrawals Reach Record High

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All is not well in the economy right now. Credit card balances and 401(k) hardship withdrawals have all recently reached records highs. Throw in rising inflation, student loan payments restarting, and it’s no surprise that consumers are financially stressed.

Check out the following from Investopedia:

As inflation and high interest rates pressure household budgets, more people are using their retirement plans as a kind of self-funded safety net, according to a new report.

Out of people with 401ks through Vanguard, 3.6% took “hardship withdrawals” in 2023, up from 2.8% in 2022, the financial company said in a report Monday. That was the highest level in at least the 19 years Vanguard has been keeping track

Source: Investopedia

According to the Daily Mail, 40% of those who took hardship withdrawals did so to pay mortgage payments and avoid foreclosure.

Foreclosures increased 10% from January 2024 to February 2024.

Clearly, all is not well with consumers right now.

If you have home equity and are struggling with credit card debt, you may want to check into a home equity agreement. It enables you to tap in the equity in your home without a monthly payment and without any interest charges. You can use the cash to wipe out your credit card debt and help restore your credit scores.

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Mike Roberts
About Mike Roberts

Mike Roberts is the founder of HEAZone.com, a published author, and a highly experienced veteran of the mortgage industry. When he's not working, he enjoys spending time with his family, skiing, camping, traveling, or reading a good book. Roberts is the author of The Reverse Mortgage Revealed: An Industry Insider’s Guide to the Reverse Mortgage, which is available on Amazon.

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