How America withstands financial hardships

Vanguard

Jeffrey Clark

Research

9 Pages

Vanguard explores the noticeable uptick in the proportion of participants initiating hardship withdrawals, the plan provisions driving these patterns, and key considerations for plan sponsors.

Key Takeaways

Increase: Hardship withdrawals continue a slow upward climb, with about 6% of eligible participants taking at least one in 2025, compared with 5% in 2024.
Lower-Income Participants: Those earning less than $100,000 annually are about 3.5 times more likely to take a hardship withdrawal. For this group, about 7 in 10 hardship withdrawals are used to avoid eviction or foreclosure or cover medical expenses.
Savings: 45% of participants have less than $2,000 in emergency savings.
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