As inflation and high interest rates pressure household budgets, more people are using their retirement plans as a kind of self-funded safety net, according to a new report.

Out of people with 401ks through Vanguard, 3.6% took “hardship withdrawals” in 2023, up from 2.8% in 2022, the financial company said in a report Monday. That was the highest level in at least the 19 years Vanguard has been keeping track.

Rules changes in recent years have made it easier for people to tap into their 401ks in an emergency. At the same time, more companies are automatically enrolling people in retirement savings plans, and automatically increasing the amount they contribute each year as well. Those increased savings have become a lifeline as rapid cost-of-living increases and high interest rates on consumer loans have made it harder for many households to make ends meet.

“Given that it’s now easier to request a hardship withdrawal and that automatic enrollment is helping more workers save for retirement, especially lower-income workers, a modest increase isn't surprising,” Vanguard said in the report, which was a preview of a more detailed analysis of retirement trends the company releases each June.

Normally, withdrawing funds from your 401k ahead of schedule comes with a 10% tax penalty, and the money you get also counts as income for tax purposes. Emergency withdrawals let you avoid those drawbacks, but can only be used to meet an "immediate and heavy financial need," not counting consumer purchases like boats and televisions.

The report paints a complicated picture of how retirement savers were doing amid the economic crosswinds of 2023. Workers had plentiful jobs and pay raises in a hot labor market but faced high inflation for consumer goods and services. That pain was compounded by the Federal Reserve’s tough medicine to subdue that inflation—the Fed’s interest rate hikes pushed up interest rates on mortgages, credit cards, and other consumer loans to multi-decade highs.

In addition to increasingly using their 401ks as emergency funds, retirement savers benefitted from the booming stock market, with the average account balance growing 19%, according to Vanguard.

“Participants generally remained resilient through 2023. While there were a few signals of a possible uptick in financial stress, overall, participants' retirement plan behavior remained in line with previous years, and most continued to maintain a long-term view,” the company said.