As 2023 winds to a close, we’ve seen an alarmingly sharp increase in 401(k) hardship withdrawals.
Case in point: Bank of America’s Q2 2023 Participant Pulse report, released in early August, which surveyed the behavior of the more than four million plan participants in the bank’s recordkeeping clients’ employee benefit programs during the last quarter. While the average 401(k) account balance of these participants rose by 9.6% to $82,300 between the end of 2022 and June 30, 2023, the number of participants who made hardship withdrawals in Q2 2023 increased by a startling 36% year-over-year to 15,950 participants.
