A new report suggests more Americans are tapping their retirement savings early, and that trend

could signal growing financial pressure for households across the country. I'm Kathy Fedke,

and this is Real Estate News for investors.

This is Real Estate News with Kathy Fedke. According to new data from Fidelity investments, the average

401k balance rose 11% in 2025. That pushed the average account to about $146,000, up roughly $14,000 from the

year before. Individual retirement accounts or IRAs also saw gains.

The average IRA balance increased about 7%, reaching just over 137,000. Strong stock market performance

helped drive these gains. The S&P 500 posted another solid year after strong gains in both 2023 and 2024.

But there's another side to the story.

Even as balances grow, more Americans are pulling money out of their retirement accounts.

Fidelity says about 19% of workers currently have a loan against their 401k, slightly higher than the year before.

About 9% of workers took out a new loan in 2025, and hardship withdrawals are also rising.

These withdrawals happen when people tap into the retirement savings early because of financial

stress. The numbers show this safety valve is being used

more frequently. Fidelity reports that about 2.3% of workers with 401K plans took a hardship

withdrawal in 2025, the highest rate the company's recorded. That's up from 2% in 2024 and significantly higher than pre-pandemic levels.

And the reasons are telling. Many workers cited avoiding foreclosure or eviction as a primary reason

for taking money out early. Others use the funds to cover medical expenses or repair damage to

their homes. While their percentage

may sound small, the trend is important because retirement withdrawals can carry long-term consequences.

Money taken out early often triggers taxes and penalties, and it also removes funds that

could have grown over decades through compounding. Financial experts say

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