Data from Vanguard shows Americans are pulling money out of their retirement accounts early at record rates to help make ends meet.
Last year, 6% of Vanguard’s clients took a hardship withdrawal, which allows them to access funds in tax-advantaged retirement accounts, such as a 401(k), before they reach retirement age. That was up from 4.8% in 2024, the asset management giant said.
Taking a hardship withdrawal is not ideal for a few reasons, one of them being that investors are subject to a withdrawal penalty of 10% for taking money out of their account before 59½. On top of that, they are then taxed on any gains. However, perhaps most importantly, they rob themselves of future growth potential on that money, especially if they are still far from retirement age.
I remember my dad emptying his retirement savings in the wake of '08. Super fun to be experiencing all this again. Troops in the middle east for extra nostalgia.
Gosh, damn. Exact same story here too. If we could just go back and tell them, right?
My dad was upset and panicked “Every time Obama opens his mouth we’ve lost more money!”
I didn’t get how any of this worked back then. I still don’t completely but I was just a kid. I wish I could have just convinced him to chill and wait it out. (And I knew enough to tell him to turn off the “24/7 screaming heads channel” but was unsuccessful…)
The upheaval that followed was not a positive life experience…
So freaking sad reliving all of this again and seeing people either haven’t learned to not panic-pull or are just that terribly desperate.
Weirdly, with my meager means, I’m trying to figure out where to put money in… y’know just in case this thing starts working again like it’s turned around in the past…