Apparently education expenses are not only weighing on retirement contributions, but triggering early withdrawals as well.
According to the most recent wave of StreetWise, the E*TRADE quarterly tracking study of experienced investors, three out of five young (under age 34) investors have made an early withdrawal from their retirement account, with education the most often-cited reason (24%) – although becoming unemployed (22%) and medical emergencies (22%) are close behind.
The survey finds that education expenses (including student loans) – tied with rent or mortgage – are one of the biggest barriers when it comes to saving, with 6 out of 10 young investors ranking it first or second. The report claims that concern about these costs has increased nearly 20 percentage points over the past four years.
Those financial strains notwithstanding – and belying the concerns about financial literacy gaps – nearly two-thirds of those young investors claim to feel extremely or very capable when it comes to managing their finances, and 80% say they’ve had moderate to heavy exposure to personal finance and investing.
This wave of the survey was conducted from April 1 to April 11 among an online U.S. sample of 917 self-directed active investors who manage at least $10,000 in an online brokerage account. The survey has a margin of error of ±3.20% at the 95% confidence level. The panel is 60% male and 40% female, with an even distribution across online brokerages, geographic regions and age bands.