American workers facing financial hardships are increasingly tapping into their retirement accounts, with hardship withdrawals surging by 30% last year. As a result, one in six workers now has an outstanding loan on their retirement, significantly impacting average 401k balances and raising questions about the sustainability of consumer borrowing, especially as “Buy Now Pay Later” spending hits record highs.
The number of workers taking hardship withdrawals from their retirement accounts leapt 30% last year as workers pull out money to avoid foreclosure, eviction, or to cover unpaid medical bills.
At this point one in six American workers now have a loan outstanding on their… https://t.co/UFn2DwPuWy
— Wall Street Mav (@WallStreetMav) November 28, 2023
It continues to feel like the retail sector is running hot on increased consumer borrowing.
Credit card debt and other forms of debt have fueled spending this holiday season.
But how long can this really last?
Follow us @KobeissiLetter for real time analysis as this develops.
— The Kobeissi Letter (@KobeissiLetter) November 28, 2023
Gen Z workers are having more difficulty meeting deadlines, per Bloomberg.
— unusual_whales (@unusual_whales) November 28, 2023