(DCNF)—The share of people who withdrew from their 401(k) for financial emergencies surged to a record high in 2023 as Americans looked to counteract rising prices and shrinking paychecks, according to The Wall Street Journal.
Around 3.6% of 401(k) participants at investment manager Vanguard Group pulled money from their account, compared to 2.8% in 2022 and above the pre-COVID-19 pandemic average of about 2%, according to data from the company given to the WSJ. Americans have been increasingly stressed by high inflation, which has increased prices by 18% overall since President Joe Biden first took office in January 2021.
Of those who withdrew cash from their 401(k) for hardship purposes in 2023, nearly 40% did so to prevent foreclosure on their property, up from 36% in 2022, according to the WSJ. Around 75% of Americans who pulled out of their accounts for hardships pulled out $5,000 or less.
The average rate for a 30-year mortgage peaked at 7.9% in October 2023, the highest in 23 years, increasing housing unaffordability and putting more Americans at risk for foreclosure. Also in October, U.S. home prices climbed for a ninth month, resulting in the highest home prices in American history.
Americans can withdraw from their 401(k) accounts by claiming it is for hardship-related reasons, but they must pay income tax and often a penalty of around 10% if they are under the age of 59.5, according to the WSJ.
American account balances also grew in 2023, rising 19% over the course of the year, nearly counteracting losses of 20% in 2022 when markets declined, according to the WSJ. Less than half of 401(k) participants were able to save more in 2023 than they did in 2022.
Inflation continues to remain elevated, rising 3.1% year-over-year in February, far higher than the Federal Reserve’s 2% target but down from the peak under Biden of 9.1% seen in June 2022. In response to high inflation, the Fed has placed its federal funds rate in a range of 5.25% and 5.50%, putting upward pressure on all interest rates, including mortgages.
All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact [email protected].
What Would You Do If Pharmacies Couldn’t Provide You With Crucial Medications or Antibiotics?
The medication supply chain from China and India is more fragile than ever since Covid. The US is not equipped to handle our pharmaceutical needs. We’ve already seen shortages with antibiotics and other medications in recent months and pharmaceutical challenges are becoming more frequent today.
Our partners at Jase Medical offer a simple solution for Americans to be prepared in case things go south. Their “Jase Case” gives Americans emergency antibiotics they can store away while their “Jase Daily” offers a wide array of prescription drugs to treat the ailments most common to Americans.
They do this through a process that embraces medical freedom. Their secure online form allows board-certified physicians to prescribe the needed drugs. They are then delivered directly to the customer from their pharmacy network. The physicians are available to answer treatment related questions.
Reach out to Jase Medical today and use promo code “Rucker10” for $10 off your order.
