Richard Yu, CEO of Huawei's consumer business, said Huawei's own operating system for smartphones and laptops could be ready for use in China by fall this year.Technologyread more
British Prime Minister Theresa May could announce her resignation in the next few days, according to U.K. media reports, as she faces increasing pressure from members of her...Europe Politicsread more
Shares of Chinese telecommunications heavyweight Huawei's suppliers took a hit on Thursday afternoon amid the ongoing fallout surrounding the Chinese telecommunications giant.Asia Marketsread more
Lawmakers, lobbyists and CEOs in the U.S. are looking to trying to pick out the best parts of the EU's privacy law called GDPR – and ditch what they see as the worst.Technologyread more
After holding parliamentary elections over seven phases, India started counting the votes on Thursday — and Prime Minister Narendra Modi's Bharatiya Janata Party-led coalition...Electionsread more
The embattled German lender saw its share price hit a record low Monday, down nearly 5% since the start of the year.Banksread more
Among the many ways Trump has shattered White House norms, his impulsive public communications rank among the most consequential. By inspiring investors or spooking them, his...Politicsread more
Political experts believe the vote could give more insight into national politics in each member state, rather than on the future of the EU itself.Europe Politicsread more
A federal judge in New York City on Wednesday said Deutsche Bank and Capital One can turn over financial documents related to President Donald Trump and his businesses in...Politicsread more
China accounted for 40% to 60% of the global increase in trichlorofluoromethane, or CFC-11, emissions between 2014 and 2017, a study found.Scienceread more
CNEX, backed by Microsoft and Dell, filed new allegations in a Texas suit accusing China's Huawei and an executive of trade secrets theft.Technologyread more
Many young retirement savers seem to be missing the point.
Nearly 60 percent of investors ages 18 to 34 say they already have taken money from their retirement account, according to research from E-Trade Financial being released today. That figure has been growing steadily since 2015, when it was 31 percent.
"There's a temptation to access retirement accounts, but it should be an option of last resort," said Mike Loewengart, vice president of investment strategy at E-Trade.
Millennials, the largest and most diverse generation in the workforce, generally face financial challenges that their parents did not as young adults.
On top of carrying most of the $1.4 trillion in student loan debt, their wages are lower than their parents' earnings when they were in their 20s: $40,581 in 2013 versus the inflation-adjusted $50,910 earned by baby boomers in 1989, according to a 2017 study by advocacy group Young Invincibles.
"There's no doubt that millennials face unique challenges," Loewengart said. "It's certainly worth recognizing, but it doesn't detract from the necessary steps to take to generate wealth."
One problem with tapping retirement money before age 59½ is that most of those distributions will generate a tax bill. Early withdrawals from 401(k) accounts and IRAs — excluding Roth versions of both — are subject not only to regular income taxes, but also a 10 percent early withdrawal penalty unless you meet one of a few exclusions.
On top of the potential tax cost, you're removing money intended to stay put so it can grow over several decades. In other words, when you take out, say, $10,000, you're removing more than that amount — you also are eliminating all the earnings and interest it would earn over several decades.
Those compounding gains are nothing to sneeze at. For illustration purposes: $10,000 invested in the Standard & Poor's 500 index in January 1988 would have grown to $211,900 by the end of 2017, according to MoneyChimp's online calculator.
Despite the consequences, many people who find themselves in a financial pinch turn to their retirement savings. The top reason cited for the withdrawal was for medical emergencies (23 percent), followed by education expenses (22 percent) and unemployment (17 percent).
However, 36 percent of workers who make early withdrawals do it to either make a big purchase, go on vacation or spend it on themselves or family.
"That's when it's about personal discipline," Loewengart said. "You have to be disciplined about your contributions during changing market environments and know the impact of compounding returns. If you're willing to take out the money for just any reason, you're jeopardizing your path to retirement."
Members of Generation X also are turning more often to their 401(k) for cash, with about 45 percent reporting having made early withdrawals. That's up from under 30 percent three years ago.