401(k) Hardship Withdrawals Are at Record Highs: What They Really Cost You

Hardship withdrawals from 401(k) plans reached a record high in 2025, with 6% of participants using this option amid rising inflation and living costs. Experts warn of significant financial costs and recommend alternatives like loans or credit cards. The IRS and employers govern strict rules for qualifying needs, including medical expenses, education costs, and home purchases.