Despite President Donald Trump’s assertion that the United States is experiencing a “golden age” with an economy that is the “greatest” on record, recent reports highlight a troubling trend among American workers. The Wall Street Journal has revealed that a record number of employees are increasingly tapping into their retirement savings. According to data from the Vanguard Group, 6% of 401(k) plans it administers took a hardship withdrawal in 2025, a significant rise from 4.8% in 2024.
These hardship withdrawals are largely motivated by pressing financial needs, with the most common reasons cited as preventing eviction and covering medical expenses. This trend comes at a time when many Americans are falling behind on debt payments, which includes difficulties with various types of mortgages, putting them at risk of foreclosure. Compounding this issue is the rising average income of those seeking assistance from credit-counseling agencies, indicating a broader financial strain on families across the country.
Democratic lawmakers were quick to critique these findings, arguing that they undermine Trump’s optimistic portrayal of the economy. Representative Mike Levin (D-Calif.) highlighted the troubling statistic, stating, “Record numbers of Americans are raiding their 401(k)s to avoid eviction or pay medical bills. That’s not winning.”
Another Democratic representative, Brendan Boyle (D-Pa.), pointed to the economic strain exacerbated by recent Republican policies, particularly the substantial cuts to Medicaid included in the One Big Beautiful Bill Act passed in 2025. He stated, “A record number of Americans are dipping into their retirement savings just to stay afloat,” and attributed this trend to soaring healthcare costs. Boyle criticized Trump for implementing the largest healthcare cuts in American history while simultaneously imposing costly tariffs.
Senate Minority Leader Chuck Schumer (D-NY) also took note of the report, asserting that the current economic landscape fails to match the “golden age” that Trump promised.
Adding to the chorus of voices expressing concern, Andrew Bates, a former senior deputy press secretary for President Joe Biden, pointed to the GOP’s budget law as a major contributor to Americans’ financial insecurity. Bates suggested that the fiscal strategies employed by Republicans prioritize tax cuts for the wealthy over essential services for average citizens, remarking on the disparity between the perceived benefits for the rich and the reality faced by many Americans.
Ann Larson, co-founder of Debt Collective, provided an additional layer of context to the concerning data on 401(k) withdrawals. While she acknowledged the gravity of the situation, she stressed that the figures do not convey the entire reality of financial distress, noting, “This is bad, but add in the almost half of older Americans who have ZERO retirement savings to pull from, and the picture is even more horrifying.”
As both sides of the political spectrum continue to grapple with these alarming trends, the narrative surrounding the state of the economy remains deeply polarized, highlighting a growing disconnect between policymaking and the lived experiences of millions of Americans.
