Why 401(k) early withdrawals are on the rise — and what to consider before you do it


Intended as a tax-advantaged way to save for retirement, 401(k) plans are increasingly becoming somewhere Americans are turning in a financial pinch. Last year, "a record share of 401(k) account holders took early withdrawals from their accounts" to help cover "financial emergencies," The Wall Street Journal said in a report, citing internal data from Vanguard Group.

In part, this shift has to do with the fact that "values in these accounts have risen substantially," making people "more comfortable dipping into their accounts when needed," said the Journal. But it's also related to the "conflicting financial forces'' Americans are facing, as the price of everything from groceries to car insurance "keeps climbing."

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