As defined benefit pension plans become more and more rare, the responsibility of saving for retirement falls increasingly on individuals. Many studies have been published about the average or median balances in retirement savings accounts and virtually all of them have reached the same conclusion - most Americans aren’t saving enough money to last them through their retirement years.

In this fact sheet we will take a look at one of the factors that contributes to this problem, that is, the availability of loans and hardship withdrawals from 401(k) retirement accounts, which can lead to lower account balances overall. Sometimes, when you are facing a financial need, you might look to borrow or withdraw money from your retirement account. This approach may be an option, but there are a number of things you should consider first. This fact sheet highlights some of the reasons why taking these loans and withdrawals might have a long-term impact on a person’s retirement security.