Americans cracking nest eggs to get by
Fidelity says a record number of workers are borrowing against their retirement savings in tough times.
It's not a move they're happy with, but options are running out in these difficult times.
Fidelity analyzed the 401k accounts it runs for about 11 million workers and found that 11% took out a loan from their accounts in the year ended June 30, according to CNBC. That's up from 9% in the previous year.
Overall, about 22% of workers had loans outstanding against their 401k accounts, CNBC reported. That was up from 20% a year earlier.
The numbers show that even people who are employed still struggle to make ends meet. Maybe they're stretching to help a laid-off family member. Or pay college tuition. Or keep up with an "underwater" mortgage. Post continues after video:
But the number of Fidelity participants who took a hardship withdrawal is still low, at 2.2%, up from 2% in the previous year. Those withdrawals, which can trigger penalty charges, were often used to pay for tuition or prevent eviction.
"We recognize that for some, taking a loan or a hardship withdrawal from their 401k may be their only option, because it's their only form of savings," a Fidelity executive told The Wall Street Journal.
But Fidelity had some good news for its participants. The stock market upswing has helped boost the average 401k balance to $61,800. That's up 15% from a year ago, when stocks were in the tank.
And 5.3% of participants actually upped their contributions in the quarter, compared with 2.9% who reduced them.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Do it once a year. This allows the best-performing asset classes to take off and run.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.