According to CoinMeta, AARP warns Americans that withdrawing money from 401(k) accounts in advance could result in a loss of 25% to 35%. Both Fidelity and AARP remind that such early withdrawals could deplete a significant portion of one's savings overnight. As stated by Marc Russell from BetterWallet, early withdrawals may require the payment of regular income tax and a 10% penalty, which means that a withdrawal of $20,000 might result in only $12,000 to $14,000 after taxes. In addition, early withdrawals also mean missing out on the long-term growth potential of the funds. With rising living costs, more and more Americans are considering early withdrawals to cope with financial pressures. A report from Vanguard indicates that in 2025, about 6% of 401(k) participants made early withdrawals due to financial difficulties, up from 5% in 2024.