Q: Erick, Is there any industry information available on employee utilization of hardship withdrawal provisions?
A: The International Foundation’s 2024 Employee Benefits Survey found that utilization of hardship withdrawal provisions averaged 5.6% of participants for 401(k) plans, 4.9% for Roth 401(k) plans and 2.3% for 403(b) plans. In addition, a preview of Vanguard’s How America Saves 2025 report showed that 4.8% of participants used hardship withdrawals when offered in 2024, up from 3.6% in 2023 and 2.8% in 2022. The increase in hardship withdrawals was particularly notable in the second half of 2024, largely due to natural disaster declarations that enable participants to take out money to repair homes following natural disasters.
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Disclosures, Sources, and Footnotes
For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.
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©2024 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.
RP-265-0525 Tracking #750406 (Exp. 06/27)
