A record number of 401(k) savers are taking out hardship withdrawals, Vanguard reports, yet another sign of the damage that inflation is having on Americans’ finances.

Roughly half of all companies with a 401(k) permit employees to take a hardship withdrawal, typically requiring it to be a last-ditch effort to deal with a financial emergency, such as a medical predicament or eviction.

As opposed to a 401(k) loan, which has more lenient requirements, hardship withdrawals cannot be repaid to one’s 401(k) account. They are also subject to taxes, and, if taken by a person younger than 59-1/2, carry a 10% penalty on top of that. Unpaid 401(k) loans are subject to those consequences, too.

“We are starting to see signs of financial distress at the household level,” says Fiona Greig, global head of investor research and policy at Vanguard.

The record number of hardship withdrawals and loans that Vanguard is seeing in the 5 million retirement accounts it oversees “could be a sign of some deterioration in the financial health of the U.S. consumer,” Greig adds.

Philip Chao, chief investment officer at Experiential Wealth in Cabin John, Maryland, agrees, telling CNBC: “People are feeling the pinch from inflation.”

Americas are also raiding their savings and racking up credit card debt. According to the Commerce Department, the personal savings rate is a mere 2.3%—the lowest in 17 years.

In October, credit card balances rose 15%, according to Federal Reserve data.

Financial planners frown heavily on retirement savers reducing their 401(k) balance with a loan or hardship withdrawal, as most people just aren’t saving enough for retirement in the first place.

“It’s a terrible idea to take money out of your 401(k),” says Ted Jenkin, co-founder of oXYGen Financial in Atlanta.

A better alternative, Greig says, is to sell assets out of a taxable investment account, rather than raiding one’s 401(k) nest egg or taking on debt.