While investors have continued to steadily contribute to their 401(k)s throughout the two-year-long financial crisis and have kept 401(k) loans, hardship withdrawals and cash-outs to a minimum, there was, after all, a sudden surge in withdrawals last year, according to Vanguard.

In fact, investors who borrowed money from their 401(k)s in the first half of the year rose 6% overall, and non-hardship withdrawals by workers 59-1/2 or older still on the job rose 14%, according to Vanguard.

Hewitt Associates found a10% increase in loans at the end of 2009, and a whopping 20% rise in hardship withdrawals. Among those who left their jobs in 2009, a startling 46% cashed out of their 401(k)s instead of appropriately rolling them over. Among those in their 20s, the cash-out rate rises to a troublesome 60%; by comparison, only 34% of people in their 50s and 43% of people in their 40s took the money.

“We speculate that the increase in loans and non-hardship withdrawals is related to the general economic conditions,” Vanguard said.

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