economy
March 6, 2026
A record share of Americans are taking emergency withdrawals from their 401(k)s
A record share of Americans are tapping their retirement savings accounts to cover emergency expenses, according to new data from financial services firm Vanguard.
TL;DR
- A record 6% of Vanguard 401(k) participants made hardship withdrawals in 2025, up from 5% in 2024.
- Common reasons for withdrawals include avoiding foreclosure/eviction (36%), medical expenses (31%), and tuition (13%).
- Increased auto-enrollment, higher savings rates, and stock market gains have led to larger 401(k) balances, providing a financial buffer.
- Recent legislation has made hardship withdrawals more accessible, including for victims of domestic abuse or federally declared disasters.
- The median withdrawal amount in 2025 was $1,900.
- Despite growing 401(k) balances for some, many Americans have limited retirement savings, with a median of only $1,000 for working-age individuals.
- Financial pressures are leading some seniors to return to the workforce after retirement.
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