More Than One Quarter of Americans Are Tapping Their 401(k)s Early, But Should They?
A new survey by Simplywise reveals that 27% of Americans are planning to tap into their 401(k) accounts early, before the required age of 59.5, which is the highest percentage since the pandemic hit. Among Black Americans, the percentage was much higher at 40%, while Hispanic and white Americans were 28% and 18%, respectively. Furthermore, one in 10 Americans in their 50s are planning to withdraw early.
49% of those who were laid off due to the COVID-19 pandemic are planning to withdraw funds from their 401(k) plans, up from 39% in July, according to Simplywise's Retirement Confidence Index. The increases are due to two coinciding factors -- the hardships created by the pandemic and the resulting relaxing of the 10% early withdrawal fees by Congress through the CARES Act. However, the 10% fee is only wiped out for those people who were financially affected by the pandemic and for withdrawals under $100,000.
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Source Fool.com
