Housing

Independent, UK -   More Americans than ever facing financial stress are turning to their retirement savings to cover immediate expenses.

Some 6 percent of those with 401(k)s took hardship withdrawals from their accounts in 2025, up from 4.8 percent in 2024 and triple the pre-pandemic rate of 2 percent in 2018, according to a study preview released Wednesday by investment firm Vanguard.

A popular option for retirement plans, 401(k)s are offered by employers and allow most employees to contribute up to $24,500 a year. In many cases, employers match employee contributions up to a certain percentage.

Generally speaking, 401(k)s are a voluntary account that employees can sign up for. Recently, more employers have automatically enrolled employees into 401(k)s, leading to more chances for hardship withdrawals, Vanguard noted.