Brett Arends of MarketWatch reports on record hardship withdrawals to avoid evictions or foreclosures. He writes:
Rising numbers of Americans are making emergency “hardship withdrawals” from their 401(k) plans to avoid eviction or foreclosure, new data reveal.
The data, from investment and retirement giant Vanguard, raise new fears about the looming retirement crisis facing millions—and about just how widespread the current “economic boom” really is.
The number of hardship withdrawals per 1,000 savers soared about 40% last year and have doubled since 2021, Vanguard reports. […]
According to the most recent Federal Reserve triennial Survey of Consumer Finances, the poorest 25% of the country—which works out at about 32 million households—have median “total financial assets” of just $1,600.
This will affect everyone. It is no secret that both Medicare and Social Security face looming budget crises. It will be obvious to everyone—and is admitted pretty much across the political spectrum—that it is simply impossible to make any savings at the expense of poorer retirees, even if anyone was so inclined. That puts yet more pressure elsewhere—sticking it to the middle- and upper-middle-class by capping the growth of their benefits, sticking it to the middle- and upper-middle-class by raising their taxes, or putting the whole thing on the national credit card, along with everything else, and hoping the bond market doesn’t notice.
Read more here.
