When it comes to retirement, many Americans are behind the recommended level of savings. In general, Millennials are behind those who are in older age cohorts when it comes to the amount of money they've stashed away for the future. This generation is in the process of paying down student loans and saving for down payments. Therefore, one of the provisions of the CARES Act provided an enticing temptation for many of these younger adults. No 10% Penalty The first stimulus package that passed through Congress provided many things. It included $1,200 for low- to middle-income Americans and $500 for each of their dependents. It included an eviction holiday for renters. Additionally, one of the provisions of the bill was a suspension of the 10% penalty that's tied to withdrawing money from a tax-advantaged retirement fund before age 59 1/2. This has provided many Millennials with the excuse to take withdrawals from their retirement funds to keep up with their rent and pay down their student loans. Millennial Withdrawals It's estimated that about one-third of Millennials have taken a loan or withdrawal from their retirement accounts during the COVID-19 crisis. Only 15% of Gen Xers and 10% of Baby Boomers have made similar withdrawals. This can be necessary for those who have lost their jobs so that they can make their rent payments and pay for food. However, those who have not had a major negative impact could be hurting their future selves. Millennial adults still have at least a couple of decades for compounding to grow their nest eggs. When they deplete those nest eggs, it becomes much more difficult to grow a retirement fund. Those who leave their money in their retirement accounts should be able to continue making contributions and see their nest egg grow in the coming years. Those with bigger account balances will have a bigger base on which to compound their wealth. This becomes especially important for Millennials who believe that they will be responsible for funding most of their retirement lifestyle given the anticipated funding shortfalls that will be seen by Social Security in the coming decades. Therefore, it will be key to save as much money as possible in a 401(k) or 403(b) account and to leave it alone for as long as possible. David A. Noyes and Co. is a DBA of Sanctuary Securities, Inc., Investment products and services are offered through Sanctuary Securities, Inc., Member FINRA and SIPC.