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Chinese companies ramp up humanoid robot development and production, often with global aims. View More

A Lingyi iTech factory in Beijing is ramping up production of humanoid robots for various startups.CNBC | Evelyn Cheng Hi, this is Evelyn, writing to you from Beijing. Welcome to the latest edition of The China Connection — a snapshot of what I'm seeing and hearing from local businesses.Humanoids are popping up everywhere, even reshaping a smartphone manufacturer. If it's a bubble, who survives? The big story Just weeks after opening in late April, a humanoid factory in Beijing says it's already produced 300 robots for clients — as it ramps up toward 10,000 this year. The 20-year-old smartphone and electronics manufacturer Lingyi iTech aims to expand annual production to 500,000 a year by 2030. Producing robots at that scale could halve the price of a humanoid, which now runs about $30,000, said the company's Vice President Philip Yang. Over 100 humanoid start-ups in China are racing to develop household helpers. Some robots can already dance and serve coffee. The question is: Who is buying them?The majority of humanoid orders so far are just one or two robots, said Bain's Beijing-based partner Xin Cheng. He's watching whether companies make repeat orders.Chinese authorities are also eager to drum up customers. Beijing opened a showroom in August filled with robots including a soccer-playing humanoid Booster T1 for 199,000 yuan (about $29,400), and a 349,999 yuan R1 Pro made by start-up Galaxea, which can sort packages.Cumulative orders surpassed 30 million yuan as of late May, a representative for the store said.But the showroom reflects how broadly humanoids are defined: The Booster T1 is the size of a child, while the human adult-sized R1 Pro has wheels instead of feet. Software is key While robot hardware often gets investors' attention, "embodied intelligence actually hinges on the convergence of AI and robotics," said Lian Jye Su, a chief analyst at Omdia. He noted companies such as UBTech and Fourier offer open-source robotics software.Nvidia is launching a robotics system for developers later this year in collaboration with humanoid manufacturer Unitree, which is planning a Shanghai IPO in the coming weeks. It's Nvidia's attempt to keep a foot in the "physical" AI world, after dominating AI development with its processors and CUDA software system.For Chinese companies, software is just a layer of humanoid development that adds to systems for manufacturing, low-priced parts and gathering training data according to Bain's Cheng."The humanoid is not a single product. It is an ecosystem," he said.Government-backed centers in Beijing and other parts of China are training robots, with people guiding them through daily tasks so that the machines can learn from real-world applications and replicate them in the future. A representative for one state-backed data collection center told me it is also working to provide the robot training data to partners in South Korea and Germany.These developments offer a glimpse into how China's rapid humanoid development has global implications. Lingyi's Yang said the company, whose current operations include a Texas factory for power outlets, plans to open a humanoid facility overseas. Meanwhile, Unitree already claims about 40% of its revenue comes from outside China.But even as Chinese regulators warn of a bubble in the humanoid industry, it appears to have become a politically correct business to participate in."The Chinese humanoid companies carry the mandate from the government to craft this image of China as a strong industrial economy that has deep tech capability and deep tech expertise," Omdia's Su said. "They receive government support just for carrying that flag or carrying that mandate."That may impact who survives the global humanoid race. Need to know Hong Kong's IPO boom is developing a performance problemOut of 30 Hong Kong-listed stocks that joined the Connect in early March, eight surged by more than 300% between their IPO and the last trading day before inclusion, but have dropped by 10% or more since. Meanwhile, China is making it harder for retail investors to steer money to U.S. stocks.U.S. proposes fresh tariffs on China and dozens of other economiesThe Office of the U.S. Trade Representative has proposed additional tariffs of up to 12.5% on imports from 60 economies including China over failure to ban goods made with forced labor.Hidden beneath AI chips, Chinese-made circuit boards raise national security concerns in U.S.New legislation would incentivize AI companies to buy American, with a 25% tax credit and $3 billion for U.S. PCB makers like TTM.Goldman Sachs cuts Hong Kong stocks in favor of mainland China AI hardware playsGoldman Sachs is officially preferring mainland Chinese stocks to those traded in Hong Kong. Coming up June 9: Trade dataJune 10: CPI, PPIJune 16: Retail sales, industrial production and investment data for May Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

CNBC's Jim Cramer said that he's becoming more cautious on stocks after several pillars of his bullish outlook have come under pressure. View More

watch nowVIDEO1:3101:31Things have changed in the market for the worse, says Jim CramerMad Money with Jim Cramer CNBC's Jim Cramer said Monday that a series of mounting risks has made him significantly more cautious on stocks."I am not that bullish," the "Mad Money" host said. "My bullishness can wait. I think you will get a better time to buy than right now."The caution comes as several pillars of Cramer's bullish outlook have come under pressure. A surprisingly strong jobs report has reduced the likelihood of Federal Reserve rate cuts, while the looming SpaceX IPO, weakness in Apple, and the prospect of additional AI-related fundraising have raised new questions about whether the market can sustain its recent rally."Things have changed. For the worse," Cramer said. "There's a shroud over this market and you ignore it at your own peril."At the top of Cramer's list is Friday's surprisingly strong employment report, which he said undermines the case for rate cuts this year.Cramer said expectations for one or two rate cuts had been a key pillar of his bullish thesis. Now, he believes the report was strong enough that "you could argue we might need a rate hike to cool the economy, not a rate cut to turn the temperature up."He also expressed concern about the upcoming SpaceX IPO. While demand for the offering appears robust, Cramer warned that an overly enthusiastic debut could ultimately backfire if the stock surges to unsustainable levels before falling sharply."What happens if it opens too high simply because there's not enough stock to go around, and then we watch a sickening decline after that moment?" he said. "That could be very bad. It would color things very negatively maybe for some time."Apple is another source of worry. Cramer said he hoped the company's Worldwide Developers Conference would serve as a catalyst for the stock, but shares instead moved lower."Apple is a leader, maybe the leader, and I don't want to lose the leader of this stock market," he said.Finally, Cramer pointed to Alphabet's recent $80 billion equity raise to fund additional artificial intelligence infrastructure. While he praised the offering's execution, he worries it could encourage other technology companies to tap investors for capital, potentially draining liquidity from the broader market.Taken together, Cramer said the prospect of higher rates, uncertainty surrounding the SpaceX deal, Apple's struggles, and the risk of additional equity offerings create a far more difficult backdrop for stocks."So, rate cuts from the Fed are likely off the table, the SpaceX deal will suck money from the rest of the market, more equity offerings could do the same thing, and now Apple's getting clocked, too. That's more negativity than I can handle," he said. watch nowVIDEO12:0112:01The boost in oil prices was the straw that broke the underclass's back, says Jim CramerMad Money with Jim Cramer Jim Cramer's Guide to InvestingClick here to read Jim Cramer's Guide to Investing at no cost to help you build long-term wealth and invest smarter Sign up now for the CNBC Investing Club to follow Jim Cramer's every move in the market.DisclaimerQuestions for Cramer? Call Cramer: 1-800-743-CNBCWant to take a deep dive into Cramer's world? Hit him up! Mad Money Twitter - Jim Cramer Twitter - Facebook - InstagramQuestions, comments, suggestions for the "Mad Money" website? madcap@cnbc.com Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Instead of selling AI tools to companies, venture firms are buying legacy companies outright and rebuilding them around AI from the inside. View More

watch nowVIDEO7:2007:20The AI rollup: Silicon Valley’s new buyout playbook is hitting Wall StreetTech Venture capital is buying its way into the artificial intelligence transformation that enterprise software hasn't delivered. Instead of selling AI tools to companies, venture firms are buying legacy companies outright and rebuilding them around AI from the inside. The bet puts VCs on offense and leaves traditional private equity, which spent the last cycle buying enterprise software at peak prices, on defense.In Silicon Valley, the strategy is known as the AI rollup. Over the past six months it's crossed into public markets twice: General Catalyst and Trian's $7.6 billion take-private of Janus Henderson (JHG) in December, and Long Lake Management's $6.3 billion agreement in May to take American Express Global Business Travel (GBTG) private at a 65% premium.General Catalyst managing director Madhu Namburi calls it "service as software." It's a take on software-as-a-service, or SaaS, which made software companies highly profitable because growth didn't require growing costs. AI rollups apply the same logic to services businesses.Venture firms have been running the playbook since 2023, mostly inside the private market. General Catalyst — which backs Long Lake alongside Alpha Wave – has co-created roughly a dozen of these rollup vehicles. Joshua Kushner's Thrive Capital runs Thrive Holdings with the same model and more than $1 billion in capital. It's put that money to work, recently backing an AI rollup of regional accounting firms. Lightspeed and Andreessen Horowitz are in the mix too, though it's early for them. The targets share a common feature. They're in industries where software adoption has lagged: healthcare, accounting, insurance, customer service, property management, construction. That also changes who can do these deals. Traditional private equity is built around financial engineering — taking a fixed cash flow, leveraging it, squeezing margins. The AI rollup is built around growth — AI scales customer-facing teams, reinvested cash funds more acquisitions. It's a twist on the venture model, essentially applying the growth mindset to established companies. Long Lake plans to hold the companies permanently, the strategy employed by Berkshire Hathaway.Long Lake is the clearest example of what the bridge to effective AI deployment looks like. Three years old, the company has acquired more than 30 businesses across HOA management, construction, and now corporate travel. It runs a proprietary AI platform called Nexus, tuned for the specific workflows of each industry that frontier labs aren't initially targeting. Alex Taubman, Long Lake's CEO, says Nexus performs five times better than general purpose models like Claude or ChatGPT on his firm's internal evaluations. Beyond the technology, the bet is that owning the company and embedding engineers inside it for years makes the change durable. Most of Long Lake's engineers came from Ramp and Palantir, where engineers work on site with customers for months at a time.Traditional private equity made the opposite bet. It spent the early 2020s buying enterprise software at peak multiples on the thesis that recurring SaaS revenue was the most defensible cash flow in business. Deals included Vista's purchase of Citrix, Thoma Bravo's acquisition of Anaplan and Coupa, and Silver Lake buying Qualtrics. Three years later, those companies are the ones most exposed to AI disruption. The recently announced partnerships between Anthropic and Blackstone, Hellman & Friedman, and Goldman Sachs — and a parallel venture with OpenAI backed by TPG — are the response. They're bringing frontier models into the portfolios already on the books. But it looks more like a consultant's attempt at the deployment problem. Someone else's AI, deployed into someone else's company, by people who don't own either.Two things could go wrong for the VC model. The first is returns. Operating companies historically produce returns of 100% to 200% over a long hold, not the 10x math venture funds often promise. Pension funds and endowments that wrote checks for venture exposure may end up with something closer to private equity. The second is execution. Vista and Thoma Bravo spent decades building operating teams to run the companies they took private. Venture firms write checks into startups. Taubman's defense: "Three years in AI is actually like three decades of pre-AI." The next take-private cycle is already starting, and it isn't in software. It's in the boring non-tech companies underneath it.Correction: A prior version of this story misidentified the firm backing OpenAI's initiative Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

The co-founder of the now defunct FTX crypto exchange is currently serving a 25-year federal prison sentence. View More

Combination showing Former FTX CEO, Sam Bankman-Fried (L) and President Donald J. Trump.Reuters | Getty Images Sam Bankman-Fried has formally submitted a request for a presidential pardon to President Donald Trump, according to information listed on the U.S. Department of Justice Office of the Pardon Attorney website.The co-founder of the now defunct FTX crypto exchange is currently serving a 25-year federal prison sentence after he was found guilty of orchestrating a massive fraud scheme that misused billions of dollars in customer funds at FTX and its affiliated trading firm, Alameda Research. The exact date of the filing isn't clear but DOJ records indicate the request for "pardon after completion of sentence" was submitted in 2026 and is pending.Trump said in a January interview with The New York Times that he has "no intention of pardoning" several high-profile people including Bankman-Fried.Trump has issued more than 1,400 pardons and commutations so far in his second term, according to the Department of Justice, including more than 1,200 Jan. 6-related cases. During his first term, he granted 238 pardons and commutations in total.The White House declined to comment for this story. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Airline CEOs complained that manufacturers aren't making enough of their engines and that they're falling short on reliability. View More

In this articleGEBARTXFollow your favorite stocksCREATE FREE ACCOUNT Technicians work on an engine at GE Aerospace's engine shop in Lafayette, Indiana.Leslie Josephs/CNBC RIO DE JANEIRO — Airplane engine makers have fallen short of what they promised airlines, major carriers' CEOs say, a problem vexing an industry that has struggled for years with aircraft shortages and more recently, a doubling of fuel prices.It's a paradox: Engine makers dazzled carriers with more fuel-efficient options for new planes from Boeing and Airbus. But production shortfalls and disappointing reliability with those engines are becoming costly problems, CEOs said in interviews at the industry's largest annual gathering here. Airline executives said they're being forced to remove engines and take them for maintenance into crowded shops earlier than expected, which is driving up costs and sucking up the fuel savings they were supposed to get from the engines. Airline leaders told CNBC this week that travel demand is still strong despite higher fares, so having aircraft on the ground means money left on the table, just as a $100 billion higher fuel bill this year is slashing airline profit prospects.Alexis von Hoensbroech, CEO of Canada's WestJet, told CNBC in an interview ahead of the more than 370-airline International Air Transport Association's annual assembly that the new engines promising fuel savings of around 15% or more compared with earlier models were "engineering marvels." "However, as you push the limits, it sometimes comes at the cost of reliability, and what we all are seeing is that those engines have to go into unscheduled maintenance far more frequently than prior engine generations," he said.Newer models of aircraft engines burn hotter, allowing them to use less fuel. That's key since fuel is airlines' biggest cost after labor. But that can also mean they wear out faster, which can ground planes, though carriers keep some spare engines. Von Hoensbroech and other airline executives told CNBC that the new the engines have not reached the reliability that airlines need, through there have been improvements. "That's a big struggle, because it adds a lot of costs," he said. "So a lot of the fuel savings are in fact eaten up by unplanned maintenance costs." 'Lack of engines' Manufacturers have invested heavily in expanding engine overhaul and other maintenance capabilities, while third-party shops have also seen a windfall. New engines are costly, but aircraft production is still behind schedule, and that's keeping older engine values up, too. For example, a CFM56 engine made by GE Aerospace and its French partner Safran that powers older Boeing 737s was going for $9.2 million at the start of the year, up 17% since 2019, according to IBA Group. A Pratt & Whitney PW1127 for newer Airbus narrow-body planes was up more than 57% over that time, according to the aviation intelligence and advisory company.Engine overhaul and maintenance has become a more than $58 billion business. watch nowVIDEO11:3111:31Why airlines like American are scrambling to make engines last longerAirlines Willie Walsh, the outgoing director general of IATA, told the conference in Rio de Janeiro that he is "deeply disappointed customers have not dented manufacturer finances," and pointed to a jump in engine supplier profits."My message to the engine [original equipment manufacturers] is simple: Stop gouging us and get back to making great engines that work and that last," he said. "Allowing these failures to extend into the next decade is totally unacceptable to the customers."For its part, GE Aerospace, which makes engines for both Airbus narrow-body A320 planes and Boeing narrow-body and wide-body aircraft, said it has been working on improvements and has also increased output."We've made significant investments to enhance time-on-wing, reduce cost of ownership, and increase output and we will continue to invest to drive meaningful improvements," the company said in a statement. "While there is more to do, we are making progress every day to continue to deliver long-term value for our customers."GE powers Boeing's bestselling 737 Max with its CFM joint venture with France's Safran. Those Leap engines are also options on the Airbus A320 narrow-body planes, with Pratt & Whitney as the other. GE engines also are used on a majority of 787 Dreamliners.United Airlines CEO Scott Kirby praised GE for making improvements, but said there are still concerns for the industry. "The biggest constraint for at least the next five years is going to be lack of engines," Kirby said. A Rolls Royce jet engine on display at the Rolls-Royce aircraft jet engine production and repair facility in Blankenfelde on February 28, 2023 near Berlin, Germany.Omer Messinger | Getty Images News | Getty Images He pointed to a shortfall of parts like forgings and castings and said when it comes to smoothing out supply, "I don't really think we've started yet."Pratt and some of its customers have the added problem of a manufacturing defect from several years ago. The issue forced airlines to ground planes with those engines, which was one of the biggest challenges that hit now-defunct Spirit Airlines. Pratt's parent, RTX, didn't immediately comment.Rolls-Royce, another manufacturer, said it is still working on efficiency. The company said it has invested £1 billion ($1.33 billion) in its Trent engine fleet and a mode that "offers up to triple time on wing, resulting in improved fleet planning and a reduced maintenance burden for customers." Read more CNBC airline news'Bring 'em on': Delta wants United's crown over the Pacific, tooSpirit's collapse, high fuel prices test limits of summer vacation spendingMeet the pilots flying Spirit Airlines' yellow jets to the desert Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

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Even used-car buyers may need a six-figure income to follow this popular car-buying rule. View More

For years, financial planners have recommended a simple rule of thumb to help drivers avoid taking on too much car debt. The so-called 20-4-10 rule suggests buyers put 20% down, finance a vehicle for no more than four years and keep total transportation costs below 10% of their gross income. The guideline is meant to keep transportation costs manageable, limit interest expenses and reduce the risk of owing more on a vehicle than it's worth since cars typically depreciate over time.However, for many buyers, the rule no longer reflects reality, financial planners say."The 20-4-10 rule isn't wrong. It's calibrated for a car market that no longer exists," says Jeff Judge, a certified financial planner at Chesapeake Financial Planners.In fact, few buyers follow the rule's four-year financing recommendation today: Just 5.6% of new-vehicle loans had 48-month terms, according to a 2025 analysis by Edmunds.And the math has only gotten tougher in recent years, with average new vehicle prices in April climbing to about $49,461 while the average used vehicle is listed for about $26,300, according to Cox Automotive. Even for buyers trying to save money by shopping used, following the rule can require a six-figure income. New-car buyers would need to earn even more. Why the rule is unrealistic for the typical car buyer For many buyers, the 10% transportation-cost guideline is the hardest part of the rule to follow. Assuming a 20% down payment on a used vehicle priced, on average, at $26,342, monthly ownership costs could look something like this:Car payment: about $505 with a 6.98% annual percentage rate. Auto insurance: $190, per Experian.Fuel: $201, per Bureau of Labor Statistics estimates.Maintenance and repairs: $100, per AAA.Total: $996 per monthWith the 20-4-10 rule, transportation costs should account for no more than 10% of gross income. Based on that, a household spending $996 per month on transportation would need annual income of roughly $120,000 to satisfy the guideline. The hurdle is even higher for new-car buyers.Using an average new vehicle price of $50,400, a 20% down payment and a 48-month loan at 7.98% APR (loans on new cars tend to come with higher interest rates), those same monthly transportation costs could approach $1,500. Under the 20-4-10 rule, that would require annual income of roughly $175,000.By comparison, the median U.S. household earned about $83,730 before taxes in 2024, according to U.S. Census Bureau data. That means even the used-vehicle example requires income above what a typical household earns.  What to do if the 20-4-10 rule doesn't work The 20-4-10 rule may be harder to follow today, but the financial risks it was designed to prevent are more relevant than ever, says Mark Stancato, a certified financial planner at VIP Wealth Advisors."People don't buy cars based on total cost anymore. They buy based on monthly payment, which is exactly how they end up in 72- or 84-month loans on a highly depreciating asset," he says.The trade-off with longer loans is that lower monthly payments can make a vehicle seem more affordable than it really is, leaving borrowers with higher interest costs and years of additional debt, he says. For that reason, "cars have quietly become one of the biggest wealth killers in the middle-class budget," says Stancato.To avoid that outcome, Judge says buyers should focus less on the monthly payment and more on how transportation costs fit within their overall budget."Stop fixating on the monthly payment and think in percentage of gross income — that's the part that has always been right," he says.For many buyers who can't make the traditional 10% guideline work, Judge says transportation costs closer to 12% to 15% of gross income may be a more realistic target without putting strain on the rest of their budget. That's generally a better tradeoff than stretching a loan to 72 or 84 months just to lower the monthly payment, he says.Another way to keep your auto loan under control is to seek out a more affordable ehicle. Stancato recommends shopping for a reliable used car that's 3 to 5 years old, which often provides a strong balance of lower depreciation, modern safety features and manageable maintenance costs.Want to get ahead at work? Then you need to learn how to make effective small talk. In CNBC's new online course, How To Talk To People At Work, expert instructors share practical strategies to help you use everyday conversations to gain visibility, build meaningful relationships and accelerate your career growth. Sign up today! Take control of your money with CNBC Select CNBC Select is editorially independent and may earn a commission from affiliate partners on links.Gas prices are high right now. Use these 6 tools to save on fuel Can you have too much money in your checking account?Which credit card strategy earns more: Bonus categories or flat-rate rewards?How to enjoy airport lounges without paying hundreds in credit card annual fees VIDEO9:3609:36I quit my $250K/year tech job–now I make $33K/year selling matchaMillennial Money

While the central bank's monthly survey showed the inflation outlook mostly unchanged, the general perception of conditions deteriorated. View More

watch nowVIDEO2:1802:18Household financial worries at highest level since 2022: New York FedSquawk on the Street U.S. households grew more worried over their financial situation, with the share of those seeing things as much worse than they were 12 months ago hitting a nearly four-year high, according to a Federal Reserve Bank of New York survey.While the central bank's monthly Survey of Consumer Expectations, released Monday, showed the inflation outlook mostly unchanged, the general perception of conditions deteriorated.The share of those seeing their current situation as "much worse" than a year ago leaped to 13.3%, up about 2.7 percentage points from April and the highest since July 2022. The total of those seeing either a much or somewhat worse situation from a year ago stood at 43.7%, which the New York Fed said was the highest since January 2023. At the same time, the outlook for the coming year wasn't any better.Those expecting their situations to be either much or somewhat worse totaled 36%, while those seeing things improving totaled just 22.9%. The net between those seeing better versus worse conditions hit its lowest since October 2022, the New York Fed said in the release.Inflationary impactThe survey comes with consumers fearful over the inflationary impact from the Iran war, which has sent energy prices soaring. Some Fed policymakers recently have expressed worry that if the conflict persists it could raise inflation expectations among consumers and businesses, making the problem longer term than the typical temporary impact from supply shocks.However, the survey showed consumer worries about prices virtually unchanged.Inflation expectations at the one-year horizon declined just 0.1 percentage point, to 3.5%. The outlook at the three- and five-year time frames held flat at 3.1% and 3%, respectively. Expectations for gasoline prices actually dropped 0.1 percentage point to 5%, while the outlook for food rose 0.6 percentage point to 5.8% and rent increased 1.4 percentage points to 7.4%. Also, the expectation for household spending growth over the next year fell to 5%, down 0.4 percentage point from April.Consumers will get their next inflation reading Wednesday when the Bureau of Labor Statistics releases the consumer price index for May. Economists surveyed by Dow Jones expect that headline inflation rose to 4.2% and core inflation, which excludes food and energy, increased to 2.9%. The Fed targets inflation at 2%.The Federal Open Market Committee makes its next interest rate decision on June 17. Markets are pricing in almost no chance the committee will lower benchmark interest rates, with expectations rising that the central bank instead will hike by a quarter percentage point by the end of the year.Correction: Inflation expectations at the one-year horizon declined just 0.1 percentage point, to 3.5%. An earlier version misstated the move. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Retirees often focus on the risk of spending too much in retirement. But spending too little poses another kind of danger. View More

Lordhenrivoton | E+ | Getty Images When people think of how much to save for retirement — and, subsequently, how to spend that money wisely in older age — many worry about the risk of running out of money early. They fear the possibility of overspending. But there's another less-appreciated danger, too, according to financial experts: The risk of underspending one's nest egg. "Overspending is risky. But underspending is risky too," said Zach Teutsch, a member of CNBC's Financial Advisor Council and founder of Values Added Financial in Washington.Data shows that it happens to many retirees. About a third of retirees still have 100% or more of their initial savings remaining by their mid-80s, according to a recent study by the Employee Benefit Research Institute, a nonpartisan research group."When you see so many people into their 80s still at 100%, you see people who are being way too conservative [with their spending]," said Craig Copeland, the director of wealth benefits research at EBRI. Read more CNBC personal finance coverageRoth IRA owners may need a second retirement account to claim the Saver's MatchMillions of people lose food stamp access as 'big beautiful bill' cuts take effectTrump Accounts create a 'legal backdoor' for Roth IRA wealth, tax attorney saysRetirees fear running out of money. Many are spending too little insteadCNBC's Financial Advisor 100: Best financial advisors, top firms ranked Of course, the opposite is true, too: "You also see some people with less than 20% [of their assets remaining] who are in the other situation: 'If I live five more years, I won't be able to do anything,'" Copeland said. About a fifth of people who entered retirement with more than $500,000 had less than 20% of their assets remaining by their mid-80s, according to EBRI's research. "This will be the foremost challenge in retirement: figuring out how to maximize retirement but still have a buffer at the end," Copeland said. The risk of underspending Vgajic | E+ | Getty Images The risk of overspending is straightforward: Running out of savings in older age may make it difficult to afford basic necessities, let alone enjoy one's later years — even more so if guaranteed income sources like Social Security aren't robust. The risk of underspending may be less obvious. But according to financial advisors, it ultimately amounts to something similar: not living as fulfilling a life as one could have. "It represents a life not lived, the vacations you didn't take because you were afraid you were going to run out of money," said Marianela Collado, a certified financial planner and certified public accountant based in Plantation, Florida. She is also a member of CNBC's Financial Advisor Council. watch nowVIDEO1:5801:58This money move can be a silent wealth killer—what to do insteadSave and Invest It's a difficult psychological leap for many people to go from a savings mindset, in which one's net worth is consistently growing, to one of drawing down that nest egg and seeing one's net worth decline, according to financial experts. "Some people spent all their life saving money, and it's very hard to switch then to spending their assets down," Copeland said. "It's not a comfortable feeling."Many people who are retired today have also lived through "an era of very good capital markets," in which there have been many years of double-digit annual stock returns after the 2008 financial crisis, Copeland said. That dynamic has made it easier to preserve or even build wealth throughout retirement, he said. Teutsch said he likes to use an analogy with clients to illustrate the risk of underspending: Imagine you're sailing a ship through a channel. Rocks on one side of the channel represent running out of money. On the other are rocks that represent the risk of missing out on experiences. "Eventually, if you sail too far the other way, you end up ditching your boat on the shoals of regret," Teutsch said."I hope people don't look back and say, 'I have more than I need, and it means I didn't need to work nights and weekends, I could have spent more time with my kids and family, or could have given more [money] away,'" he said. It represents a life not lived, the vacations you didn't take because you were afraid you were going to run out of money.Marianela Colladocertified financial planner and certified public accountant based in Plantation, Florida Retirees shouldn't be afraid to enjoy the money they worked hard to save for years — within reason, of course, financial advisors said. That's especially the case earlier in retirement, when retirees are more likely to be mobile and active relative to their later years, they said. Ultimately, after death, the money will be spent on the retiree's behalf — perhaps inherited or donated to charity — but they won't get the chance to enjoy it, the advisors said."As long as the financial plan indicates it's a good idea, I encourage clients to give money to their favorite causes, to kids, to live well when they're alive and can enjoy it," Teutsch said. "If you help somebody buy a house [for example], you get a lot of enjoyment out of that." Why figuring out retirement spending is difficult Assessing how to best spend one's nest egg from year to year is difficult because there are many unknowable factors that have a large bearing on success, advisors said. For example, one's life span is impossible to predict, as are future returns on financial assets. Retirees also must increasingly rely on 401(k)-type plans in which they're forced to manage their savings rates and investments and determine how to translate that lump sum into future income. Earlier generations were more likely to have a pension, which outsourced much of that complexity to employers. How much can you spend in retirement? Momo Productions | Digitalvision | Getty Images There are some guiding principles for do-it-yourselfers, though, according to financial planners. The 4% rule is "a really good starting point," for example, Collado said. This rule of thumb gives an approximation of how much money retirees can withdraw from their savings each year in order to give themselves good odds of not running out of money 30 years later. Retirees would withdraw 4% of their portfolio in the first year, then give themselves a "raise" in the second year based on the inflation rate. Same in the third year, and so on. These funds would stack on top of other sources of income, such as Social Security. For example, an investor would withdraw $40,000 from a $1 million portfolio in the first year of retirement, which is 4% of the total. If the cost of living rises 2% that year, the next year's withdrawal would rise to $40,800 — or, 2% more. Another 2% cost of living increase in the third year would translate to a $41,616 withdrawal. And so on.One caveat: Retirees should ensure they're withdrawing at least enough to cover any required minimum distributions from their retirement accounts, advisors said. Buena Vista Images | Photodisc | Getty Images However, the 4% rule isn't perfect and, since it uses conservative assumptions, may contribute to underspending, advisors said. Retirees can also consider a "dynamic spending" approach, in which spending isn't static like the 4% rule would suggest but is flexible according to market conditions, Teutsch said. In a year of positive stock returns, for example, retirees could take out more money — perhaps a 7% withdrawal — and reduce that sum in down years, maybe to 2.5%, for example, he said. Retiree spending tends to be more U-shaped than static, whereby retirees generally spend more early in retirement when they're more active, throttle back when they inevitably slow down a bit and then spend more in older age when they may have a greater need for costly long-term care, for example, he said. watch nowVIDEO4:4104:41AI trajectory and the impact on retirement savings: Here's what to knowSquawk Box A dynamic approach also helps to reduce something called "sequence of returns risk," whereby retirees increase the risk of running out of money in retirement by withdrawing from their stocks when the stock market is declining. This risk is heightened earlier in one's retirement, advisors said. Retirees might also consider a "dynamic earning" strategy in such years, Teutsch said. For example, people who are able to take on some side work might supplement their portfolio income by working a few hours a week on a consulting project or something similar, he said. 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The tech stock sell-off accelerates in Asia. Tech stocks fell in Europe but rebounded later on Monday. View More

In this article9984.T-JPASMLIFX-DESTMASM-NLBESI-NLFollow your favorite stocksCREATE FREE ACCOUNT Sinology | Moment | Getty Images Tech stocks in Asia extended their sell-off Monday, as investors soured on global AI-linked plays after the U.S. tech-heavy Nasdaq declined more than 4.5% last week.Memory chip behemoths and heavyweights on South Korea's Kospi Index, Samsung Electronics and SK Hynix, ended Monday's trading session down 10.18% and 7.68%, respectively. The Kospi plunged as much as 8%, as the two companies make up over 40% of the index. Taiwan Semiconductor Manufacturing Co, or TSMC, was down 2.96%, while Hon Hai Precision, also known as Foxconn, fell 5.27%.Japanese tech investor Softbank Group plunged 6.1%, while Tokyo Electron and Advantest were down 7.45% and 5.72%, respectively.European chip stocks followed Asian peers lower in early dealmaking, before ending the session in positive territory.BE Semiconductor's shares gained 3.5%, while ASML closed 3.6% higher. Infineon was up 2.3%, while STMicroelectronics advanced 7.4%. ASM International traded 2.7% higher.The moves follow a risk-off sentiment amid expectations that interest rates in the U.S. could stay higher for longer, following last week's U.S. labor data that sharply beat estimates. "We are pushing the final two rate cuts in our Fed forecast back to June and December of 2027. The labor market has been stronger than we anticipated," Goldman Sachs said in a note on Friday.The share price declines in Asian tech stocks follow a recent rally that was supported by investor optimism on AI demand. Last month, Samsung Electronics and SK Hynix each crossed $1 trillion market valuation, while SoftBank recently became the most valuable company in Japan. The sell-off in tech names was triggered after Broadcom's revenue for fiscal second quarter missed market estimates last week, plunging its shares and causing a cascading impact on the tech sector.The VanEck Semiconductor ETF (SMH) lost over 9% Friday; Softbank's British chip firm Arm Holdings, which is listed in New York, had dropped nearly 13%, while Micron Technology declined more than 13%."The tech-led rout erased approximately $1.8 trillion in S&P 500 market cap," according to a UOB note on Monday. UOB, however, said that tech and software companies will remain in focus with "the debut of a space exploration/AI/tech company on the Nasdaq on Fri (12 Jun), in what may be the largest IPO ever."Broader Asia markets were also lower Monday, after a fresh escalation in the Iran war signaled that the conflict is far from over.CNBC's Mike Sheen contributed to this report. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.