Bank of America published its Q2 2023 Participant Pulse on Aug. 8, revealing a rise in average 401(k) balances by $7,250 (9.6%) since the close of 2022. The report additionally noted a rising trend of 401(k) participants initiating withdrawals from their plans, according to a press release.

"The data from our report tells two stories – one of balance growth, optimism from younger employees and maintaining contributions, contrasted with a trend of increased plan withdrawals," Lorna Sabbia, head of retirement and personal wealth solutions at Bank of America, said.

The past year saw a 36% increase in participants opting for hardship distributions, coinciding with previous upticks earlier in the year. Additionally, the second quarter saw a rise in the percentage of participants borrowing from their workplace plans, reaching 2.5% compared to 1.9% in the preceding quarter. The Pulse report observes the behavior of plan participants within Bank of America's recordkeeping clients' employee benefits programs, encompassing a participant base of over 4 million as of June 30, according to the press release.

“This year, more employees are understandably prioritizing short-term expenses over long-term saving. However, it’s critical that employees continue to invest in life’s biggest expense – retirement,” Sabbia said. 

In order to offer a more comprehensive assessment of confidence in financial readiness, Bank of America has broadened the scope of its quarterly Participant Pulse report series. This expansion involves an exploration of engagement within Health Saving Accounts (HSA) as well as encompassing the broader spectrum of sentiments related to financial well-being, alongside the existing analysis of 401(k) trends, the release stated.