The Surge in 401(k) Hardship Withdrawals Explained (Live)

In the midst of economic challenges, a Bank of America analysis reveals a 13% increase in the number of 401(k) plan participants taking hardship distributions between the second and third quarters, reaching 18,040, the highest level in at least the past five quarters. This trend is indicative of growing financial stress among Americans, attributed by experts to factors such as high inflation and the rising cost of living. Despite the cash crunch, the analysis also highlights the resilience of retirement savings, with 401(k) contribution rates holding steady at 6.5% during the third quarter. Key Takeaways: // Rising Hardship Distributions: The number of Americans resorting to 401(k) hardship distributions increased by 13% in the third quarter, reaching 18,040, the highest level in at least five quarters. // Financial Stress Indicators: Despite positive economic indicators like high GDP and low unemployment, the surge in 401(k) withdrawals suggests that some Americans are grappling with financial stress, possibly exacerbated by factors such as high inflation and increased living costs. // Credit Card Debt and Delinquencies: In addition to tapping into retirement accounts, a growing number of consumers are turning to credit cards for emergency funds, as evidenced by a $148 billion increase in credit card balances over the past year, reaching $1.08 trillion. The share of households newly delinquent on credit cards is at its highest level in twelve years. // Steady Contribution Rates: Despite economic challenges, 401(k) contribution rates remained steady at 6.5% during the third quarter, signaling a commitment to retirement savings among a significant portion of the population. // Generational Differences in Saving Habits: While facing financial challenges, the analysis reveals that more than one in five (21.3%) of Gen Z and 10.4% of Millennials are increasing their contribution rates to retirement accounts, showcasing a positive savings behavior despite the economic uncertainties. THANK YOU FOR LISTENING! #401kWithdrawals #FinancialStress #EconomicChallenges Continue to support the show by subscribing, sharing and leaving comments on your favorite platforms. This help others like yourself find me.   _________ AFFILIATES/SPONSORS: DISCLAIMER: these are sponsored links in which I get paid and you can benefit for being a listener to the podcast. #ad EarthBreeze Laundry Sheets: https://aboutthatwallet.com/earthbreeze Join the About That Wallet Newsletter! https://aboutthatwallet.com/newsletter Gain access to over 5,000 training videos to increase your skillset: https://aboutthatwallet.com/courses //My equipment: Rode Caster Pro - https://amzn.to/3i596tF Streamyard - https://streamyard.com?pal=4718936395612160 SHURE SM7B Dynamic Microphone - https://amzn.to/3AbV040 Microphone Stand - https://amzn.to/3NIeBfz //Listen to the show on Audible: Try Audible and get 2 free books - https://amzn.to/3tWuDdJ _________ Follow Me: IG: https://instagram.com/aboutthatwallet Twitter: https://twitter.com/aboutthatwallet Website: https://aboutthatwallet.com -- DISCLAIMER: I am not a CPA, attorney, insurance, contractor, lender, or financial advisor. The content in this audio are for educational purposes only. You must do your own research and make the best choice for you.  Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments. If you need advice, please contact a qualified CPA, CFP, an attorney, insurance agent, financial advisor, or the appropriate professional for the subject you would like help with. Episode 223 Want to create live streams like this? Check out StreamYard: https://streamyard.com/pal/d/4718936395612160

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