Posted on 08/08/2023 4:16:44 PM PDT by Diana in Wisconsin
More Americans are tapping their 401(k) accounts because of financial distress, according to Bank of America data released Tuesday.
The number of people who made a hardship withdrawal during the second quarter surged from the first three months of the year to 15,950, an increase of 36% from the second quarter of 2022, according to Bank of America’s analysis of clients’ employee benefits programs, which are comprised of more than 4 million plan participants.
It’s a “pretty troubling” development if more people are resorting to making hardship withdrawals, Matt Schulz, chief credit analyst at LendingTree, told CNN.
“You understand why people do that in the heat of the moment, but the opportunity costs on that are really, really high over time,” he said.
Bank of America’s latest Participant Pulse report also found that a greater percentage of participants borrowed from their workplace plans from the first quarter, and average contributions trailed off as well.
However, overall employee contributions continued to hold steady for the first half of the year, and a greater share of participants upped their contribution rate than decreased it.
“The data from our report tells two stories — one of balance growth, optimism from younger employees and maintaining contributions, contrasted with a trend of increased plan withdrawals,” Lorna Sabbia, head of retirement and personal wealth solutions at Bank of America, said in a statement. “This year, more employees are understandably prioritizing short-term expenses over long-term saving.”
While the labor market remains strong, the economy is growing and consumers are spending, the global pandemic followed by two years of persistently high inflation have taken their toll on household finances.
Since 2019, household debt balances have increased by nearly $3 trillion, according to New York Federal Reserve data through the first quarter of 2023.
(Excerpt) Read more at channel3000.com ...
I am behind on one of my credit cards, and I always pay them off monthly. What my credit card company did was move to paperless billing, so I never saw a paper bill, and most likely the bill went into my junk mail. I am really pissed off about this, because I never requested paperless billing. I wonder if this is some sort of scam by the credit card companies to force us to pay late fees. This was Capital One.
I’ve had a number of companies inform me that they are complying with my latest request. When I track down what is going on it turns out they had changed everybody to paperless billing even though they never requested it.
Okay, Americans, that’s easy! Just re-elect Trump, and you can put it all back—and then some.
Less for the Feds to seize when they finally decide they need the money more than the peasants do.
Save and prep for the future, folks. It will get worse.
they are investing in hard commodities instead
beans, gold, ammo
I cashed out my 401K and used the funds to make upgrades on the house. Better bang for the buck.
some emergency ambulance services almost sunk me.
```````````````````````````````````````````
In 1989 I had to use an ambulance service and at the time my insurance didn’t cover it. $1,000 back then. I hate to think what it costs now.
A few years later we moved to a smaller town that had a volunteer fire department/ambulance service, which my wife and I each used a few times over the years at NO CHARGE.
Yes, I buy tickets to their pancake breakfasts every year with generous donations.
This was Capital One
`````````````````````
When I opened my Capital One account, several years ago, paper bills were an option that I chose. Then I opened an online account and paid online. They have continued to send paper bills and I continue to pay online for the past 15 years or so.
A couple of trips cost me a little over 2 grand.
Re: Paperless billing. Yep. Same thing happened to me. They switched everyone to it without notice. Supposedly you had to ‘opt out’ which I never knew about, either.
So now I PAY $3/month for them to send me a paper copy, but I’ll do it to have a physical record that I can review each month where I usually find some mistakes. Grrrr!
Necessary evil, though it is paid in full each month - I just charge household & food to it for the perks. Everything else is paid in cash, and I am using more cash for the household purchases too, these days.
At least they’re still printing receipts if you want one. Wonder how long before they stop doing that, too? Not everyone wants everything done ‘electronically.’
And, yes. I plan on being the Last Woman Standing WITHOUT a ‘smart’ phone. :)
I have seen many friends who have taken out those 401K loans because they are living check to check and the inflation is killing them. Sad...
...paperless billing...Capital One....
I have one of those cards—had it for decades and never got rid of it—pay off in full every month.
In my case they stopped sending the bill for a while—and then started for a few months—then stopped again...very strange.
I put it on my monthly calendar and pay by phone regardless at this point.
And, yes. I plan on being the Last Woman Standing WITHOUT a ‘smart’ phone. :)
````````````````````````````````````
I may already be the last man standing who has neither a cell phone nor a land line.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.