A growing number of Americans are resorting to early withdrawals from their 401(k) accounts, signaling financial distress is on the rise
According to Bank of America, there was a 36% surge of employees resorting to hardship withdrawals
The Indications Of Financial Strain
The increase in Americans tapping into their 401(k)s comes as they confront stubbornly high inflation that has rapidly eroded workers’ purchasing power. As they’re forced to pay more for everyday necessities like food and rent, more of their savings are burning up, resulting in an increasing need to turn to Credit Cards to cover these basic expenses
Also, it’s not just about workers increasing their debt load, but also about the delicate financial balance many workers are maintaining. A medical emergency, job loss, or even restarting student loan payments could tip many into financial distress. According to the Fed’s Economic Well-Being of U.S. Households survey, 37% of Americans lack enough money to cover a $400 emergency expense
The Vicious Cycle
As more Americans increase their usage of Credit Cards, carry-over debt and max limits are reached more often, with total Credit Card debt surging to a record high of $1.13 Trillion, according to recent New York Federal Reserve data
This ‘debt cycle’ burden is disproportionately born by low-income Americans whose already-stretched paychecks are heavily affected by price fluctuations
On-Demand Pay Is Proven To Help Employees Break The Debt Cycle…And Cover Unexpected Expenses
On-Demand Pay helps cash-strapped employees by giving them the ability to receive a portion of their wages (at zero cost) whenever they need, thereby helping them cover unexpected expenses such as medical bills, car repairs, utility bills, etc. without resorting to borrowing money or early 401k withdrawals
On-Demand Pay is proven to help Employees:
✓ Save $1,200/year by reducing Credit Card dependence (as well as other financial institution lending fees)
✓ Increase their ability to meet basic needs by 32%
Rellevate’s Revolutionary PayCard with its embedded Pay Any-Day feature is a zero-cost, On-Demand Pay employer advantage
