Trump's new 401(k) match collides with a harsh reality: More workers are dipping into their retirement cash just to get by | Fortune

"With nearly a quarter of all U.S. households living paycheck to paycheck, according to Bank of America, more workers are looting their 401(k) accounts to get by. A new report entitled How America Saves 2026 from Vanguard found that a record number of its 401(k) plan participants made a hardship withdrawal from their accounts, up to 6% last year from 5% the year prior."

"Middle class households now encompass a smaller share of income while the top 1% doubled their slice of the economic pie, owning nearly $54 trillion in total wealth, according to Federal Reserve data. And many Americans feel stuck when it comes to retirement savings. Even after decades of saving, households still fail to break out of the middle class."

"Vanguard notes part of the reason more people have dipped into their retirement is because it's now easier to do. With the rollout of SECURE 2.0, users can self-certify that they meet IRS requirements, eliminating paperwork and increasing the speed of certification. But the company noted only 3% of plans were offering the self-certification provision."

President Trump proposed a federal 401(k) matching program offering up to $1,000 annually for workers without employer-sponsored plans. However, the proposal ignores a fundamental reality: nearly a quarter of U.S. households live paycheck to paycheck and cannot afford to invest. Vanguard data shows record hardship withdrawals from 401(k) accounts, rising to 6% from 5% year-over-year, as Americans deplete retirement savings for survival. Meanwhile, wealth inequality has widened significantly, with the top 1% now controlling nearly $54 trillion while middle-class income share shrinks. SECURE 2.0 made hardship withdrawals easier through self-certification, though only 3% of plans offer this provision, contributing to a K-shaped retirement savings divide between high and low-income earners.

Read at Fortune