A Troubling Trend: Why More Workers Are Tapping 401(k)s Early and How to Resist

Early 401(k) withdrawals can create costly setbacks for future retirement savings. ShutterstockProfessional/ShutterstockWhat’s the main goal of your 401(k)? Well, my dear Watson, it’s to provide for your retirement. Specifically, it’s a long-term investment that benefits from compound interest. But for a record number of Americans, the “long term” is taking a back seat to immediate financial struggles.In 2025, 6 percent of Vanguard 401(k) plan members took hardship withdrawals. That’s a big jump from 4.8 percent in 2024 and much higher than the roughly 2 percent annual rate we saw before the pandemic.