Trump Claims ‘Only Thing Rising’ Is 401(k)s, Yet Hardship Withdrawals Hit All-Time High

Market Gains and Retirement Savings

Markets can rise quickly, but behind the scenes, there are pressures that many Americans are facing. President Donald Trump has highlighted growing retirement balances as a sign of economic strength, yet new data reveals that many individuals are still accessing their retirement accounts to manage everyday expenses.

During a December rally at the Mount Airy Casino Resort in Mount Pocono, Pennsylvania, Trump linked market gains directly to retirement savings. “I mean, the only thing that it’s really going up big, it’s called the stock market and your 401(k)s,” he said. This message was echoed in Washington during his State of the Union address last month, where he stated, “your 401(k)s are way up.” He added, “Since I took office, the typical 401(k) balance is up by at least $30,000.”

Data Supports Part of the Claim

The data supports part of this claim. Fidelity Investments, the nation’s largest 401(k) provider, reported that the average 401(k) balance rose to $146,400 in 2025, an increase of $14,700, or 11%, year over year. Individual retirement accounts followed a similar trend. The average IRA balance climbed to $137,095, up $9,561 or 7% from the previous year.

Vanguard also reported significant gains across retirement plans. The average account balance reached $167,970 in 2025, a 13% increase, largely driven by strong market performance throughout the year.

Rising Borrowing Activity

While balances grew, borrowing activity also increased. Fidelity found that 19.4% of participants had an outstanding 401(k) loan in 2025, up slightly from 18.9% the year before. More concerning is the rise in hardship withdrawals, which reflect deeper financial strain. Fidelity reported that 2.7% of participants took a hardship withdrawal in 2025, up from 2.5% in 2024.

Vanguard’s data paints an even clearer picture. Roughly 6% of workers took a hardship withdrawal in 2025, marking a record high and a sharp increase from pre-pandemic levels.

Reasons for Withdrawing Retirement Savings

The reasons behind these withdrawals point to real financial strain. Vanguard found that the median hardship withdrawal was $1,900. The most common reasons were preventing foreclosure or eviction, which accounted for 36% of withdrawals, followed by medical expenses at 31%.

Housing pressure is a major factor. ATTOM Data reported 367,460 U.S. properties had foreclosure filings in 2025, up 14% from the prior year. That trend has continued into 2026. February alone saw 38,840 properties with foreclosure filings, a 20% increase year over year, while foreclosure starts rose 14% to 25,928.

More than one-third of hardship withdrawals are going toward keeping a roof overhead.

Contrasting Trends

The contrast is hard to ignore. Retirement balances are climbing, fueled by market gains, yet a growing share of savers are pulling money out early. For some households, rising account values may look reassuring on paper. But the increase in withdrawals suggests that for many, those gains are being offset by immediate financial needs.

Even as retirement balances rise, some investors are looking for ways to position their portfolios to capture market momentum — for example, with diversified or sector-focused ETFs like those offered by Direxion.

Navigating Retirement Challenges

Retirement can be a difficult part of life to navigate, and a financial advisor can help. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.