Retirement savers posted a mix of good and bad results in the first half of 2023.

On the good side, the average 401(k) participant saw their account balances rise by $7,250 during the first half of the year, a 9.6% increase according to Bank of America’s Q2 2023 Participant Pulse survey. But researchers also recorded a large rise in the number of participants taking hardship withdrawals from their plans.

The number of participants taking hardship distributions from their plan increased 36% in the second quarter on a year-over-year basis, according to the survey, which analyzed the behaviors of over four million workplace retirement plan participants in Bank of America’s recordkeeping clients employee benefits programs. Additionally, 2.5% of participants took loans from their 401(k) in Q2, up from 1.9% in Q1.

Bank of America recorded a small drop in feelings of financial wellness among plan participants—out of a possible 100 points, the average financial wellness score for employees was 56, barely down from 57 at the end of 2022. Overall, women (52) reported feeling less financially well than men (59).

At the same time, employee contributions remained steady in the second quarter, with a 6.5% average contribution rate among Bank of America’s plan participants through the first half of 2023. More participants (10.2%) increased their contribution rate in the second quarter than decreased their rate (2.2%).

Bank of America also found rising Health Savings Account balances, with the average balance increasing 11.9% from year-end 2022 to mid-year 2023, from $3,931 to $4,397—perhaps a sign that more Americans are using their HSA as a long-term savings and tax-mitigation tool versus a spending account for medical expenses. Nearly four-in-10 account holders contributed more than they withdrew in the second quarter.

“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,” said Lorna Sabbia, head of retirement and personal wealth solutions at Bank of America, in comments released today. “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.”