Core Insights - Millions of workers are withdrawing or borrowing from their 401(k) accounts to cover everyday expenses, contributing to a hidden retirement crisis [2] - Employees without emergency savings are twice as likely to tap into their retirement funds, with hardship withdrawals increasing from about 2% in 2018 to approximately 5% by December 2024 [2][7] - Financial stress is costing U.S. employers an estimated $183 billion annually in lost productivity due to distracted workers [3] 401(k) Loans Overview - A 401(k) loan allows borrowing against retirement savings, typically up to the greater of $10,000 or 50% of the vested balance, capped at $50,000 [4] - The application process is straightforward, with no credit checks and interest paid back into the borrower's account, often at lower rates than personal loans [5] Downsides of 401(k) Loans - Borrowing from a 401(k) can result in lost investment growth, potentially delaying retirement [6][8] - If employment is terminated, the full loan balance may need to be repaid quickly, or it could be treated as a taxable distribution, incurring taxes and penalties [6] - Loan limits may not cover all financial needs, and the long-term costs to retirement security may outweigh the short-term relief [8]