Hardship withdrawals from a 401(k) plan
DEAR TRUST OFFICER: I need money. Can I withdraw some from my 401(k) plan?—TEMPORARILY BROKE
DEAR TEMPORARILY: You are asking about a “hardship withdrawal.” If you do withdraw money from your 401(k), you will have lots of company. According to a recent article in The Wall Street Journal, at one major plan administrator about 2% of plan participants had withdrawals before the pandemic. That percentage rose to 4.8% in 2024 and 6.0% in 2025. The median reported withdrawal was $1,900.
Whether your plan administrator will approve your withdrawal request is an open question. Generally, such withdrawals are supposed to be for sudden, unexpected financial needs. Top reasons include avoiding foreclosure or eviction, and paying medical expenses.
Just because you can do it does not make it a good idea. When you withdraw money from your 401(k) account, you have less money in the market, growing to meet your retirement needs. That deficit can be hard to overcome in future years. Most financial advisors recommend that withdrawing from a 401(k) account to meet current ordinary expenses should be a last resort.
Do you have a question concerning wealth management or trusts? For any inquiries, please contact us.
(March 2026)
© 2026 M.A. Co. All rights reserved.