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Workers need emergency access to funds, but often can be helped in other ways

More people are taking hardship withdrawals from their 401(k) accounts, according to a recent Vanguard report, and while not ideal, this isn’t the five-alarm fire that it may appear to be.

A preview of Vanguard’s yearly “How America Saves” deep dive into 401(k) data shows that the number of workers taking out money rose “modestly” to 6% in 2025 from 5% the prior year. At the same time, participation is at a record high of 85%, thanks to auto-enrollment. Balances are shooting up because of market conditions and the auto-escalation of contribution rates.

Beth Pinsker is a financial-planning columnist at MarketWatch. She has been a certified financial planner (CFP®) since 2018. Previously, she worked at Reuters, Fidelity and Walletpop.com. Prior to covering personal finance, she was a film critic and entertainment business reporter, writing for Entertainment Weekly, The Dallas Morning News and many other publications. Her book, "My Mother's Money: A Guide to Financial Caregiving," is out in November 2025 from Crown Currency. You can follow heron BlueSky (@bethpinsker.bsky.social) or LinkedIn (@bpinsker).