Americans Are Doing This Money Don’t

Jacqui Kenyon
Posted

pulling from 401(k)The years following the recession have certainly been years of hardship for many American families, and their financial decisions reflect that.

Last year, nearly one in three employees took a hardship loan from his or her 401(k), according to Bloomberg Businessweek. This is in spite of the economic recovery and the hefty fees that often accompany premature withdrawals from retirement accounts.

Those who took these hardship loans largely fell into one of three categories: lower-income workers, young workers and women.

Thirty-four percent of women pulled from their 401(k)s, compared with 23% of men, a larger difference than in the previous year. Forty-five percent of employees with salaries from $35,000 to $60,000 took loans from their accounts, compared to 11% of those earning $200,000 or more. Workers aged 30 to 44 increased the number of loans from their 401(k)s 10% over the previous year, from 27% in 2011 to 37% in 2012.