Financial crisis has forced a record number of investors to withdraw money from 401(k)s prior to retirement
Thursday, September 02, 2010
By Tim Grant, Pittsburgh Post-Gazette
Withdrawing money from a 401(k) prior to retirement age goes against the advice of most financial experts, yet a record number of people are dipping into funds they've set aside for retirement to pay for immediate needs.
Fidelity Investments, one of the nation's largest suppliers of retirement plans, recently reported a sharp increase in the number of 401(k) participants who tapped their retirement accounts for hardship withdrawals between April and June this year.
About 62,000 of Fidelity's 11 million account holders requested hardship withdrawals compared with 45,000 who did so during the same period last year. The top reasons were to prevent foreclosure and eviction, pay for college and purchase a primary residence.
The average age of people who took a loan or hardship withdrawal was between 35 and 55 years. The average loan amount was $8,650. The company did not disclose the average hardship withdrawal amount.
Read more: http://www.post-gazette.com/pg/10245/1084372-28.stm