Millennials are less focused on maximizing growth for their retirement assets than baby boomers, according to a survey.
When it comes to their retirement savings, the MFS Investing Sentiment Insights survey finds that 60% indicate criteria other than growth are top priorities: 29% say capital protection while another 31% identify income generation.
However, 32% of boomers say maximizing growth is their most important criterion when making decisions about their retirement assets. This aggressive stance points to the lasting impact the Great Recession has had on boomers and their savings.
More than one-fifth (22%) of millennials believe that maximizing income is the most important factor when making decisions related to their retirement assets, versus just 17% for boomers.
“Boomers appear desperate to rebuild their nest egg before retirement, with significant equity exposure in the face of a compressed investment time horizon,” says Doug Orton, vice-president of business development for MFS. “Millennials, even with time on their side, would rather preserve what they have and avoid the market.”
More than half (51%) of boomers say that they are concerned about being able to retire when they thought they could, and 37% say that over the past few years they have lowered their expectations about what life would be like in retirement. Half agree that a drop in the stock market is the biggest risk to their retirement assets, and only 45% are highly confident that their portfolio is properly balanced.
“Whether it is fear or desperation, boomers appear to think they can grow their way out of the problem of not having a large enough retirement nest egg,” he adds. “Millennials seem determined to avoid the risk of the stock market, even though, on average, they have 30 years or more to ride out the ups and downs.”
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