401 Plan has become the "emergency fund pool" for Americans.

The financial emergency situation is forcing more and more Americans to tap into their 401 retirement accounts. According to data from Vanguard Group, which manages accounts for nearly 5 million people, about 4.8% of account holders withdrew funds early last year to avoid foreclosure, pay medical expenses, etc., setting a new record high. This percentage is higher than the previous record of 3.6% set in 2023, and significantly higher than the pre-pandemic average of about 2%. The reason 401 accounts are becoming emergency funds is due to more employers automatically enrolling employees, including those who previously had little to no savings; Congress also relaxed restrictions on using retirement savings for emergencies. Americans are facing conflicting economic situations: low unemployment rates and rising wages are leading to more funds flowing into retirement accounts, but consumer confidence is falling, grocery prices are rising rapidly, and more people are falling behind on car loans and credit card payments. David Steinnett, strategic retirement consulting director at Vanguard Group, said, "While being in a difficult situation is not ideal, having savings to fall back on is a positive aspect."