The economic meltdown is still fresh in the minds of many millennials. Consequently, some are placing their trust in cash when it comes to saving for retirement.
A recent Bankrate study shows that the majority of young Americans feel cash is the safest bet when it comes to long-term investments.
This is not good news, considering this age group has the largest savings burden when it comes to building a healthy retirement nest egg. They will have a much tougher time if they rely primarily on low-yielding cash investments.
“The preference for cash and aversion to the stock market among young adults is very troubling considering this age group has the biggest retirement savings burden. They won’t get there without being willing to assume a little short-term price risk in their long-term money,†says Bankrate.com’s chief financial analyst, Greg McBride, CFA.
Some of the survey results:
– 39% of respondents age 18 to 29 say cash is their preferred way to invest money they don’t need for at least 10 years. This is triple the number who picked the stock market.
– Generally, Americans chose cash as their preferred long-term investment. Approximately one in four Americans prefer cash investments for money they will not need for at least 10 years.
– Cash scored slightly higher than real estate (23%) for the No. 1 spot, while stocks came in third (19%).