The number of workers making hardship withdrawals from their retirement accounts reached a record high in the second quarter as the sagging economy drains household wealth.
High unemployment, fewer working hours and reduced amounts of overtime have hit the take-home pay of many workers, The Associated Press reported.
"People tend to be taking home less," Beth McHugh, vice president of marketing insight at Fidelity Investments, told the AP. "As a result the percentage of individuals initiating hardship distributions is one of the things we're concerned about."
Fidelity administers 17,000 plans, which represents 11 million participants. In the three months through June, 62,000 workers initiated a hardship withdrawal, compared with 45,000 in the second quarter of 2009.
To qualify for a 401(k) hardship withdrawal, a worker must demonstrate an immediate and heavy financial need such as certain medical expenses or payment to prevent eviction or foreclosure of a primary home.
Take the first steps to building your portfolio.View Course »