Fear Causing Young Adults To Risk Retirement

Photo (cc) by TheeErin

More than 40 people under the age of 40 made Forbes‘ list of billionaires this year, but studies show members of the millennial generation remain hesitant to invest their earnings.

A survey by Capital One ShareBuilder for CNN Money found that 93 percent of millennials are less confident about investing because they distrust the financial markets and lack knowledge about them, CNN Money reported today.

Millennials were born between the early 1980s and early 2000s, and experiencing the Great Recession as a teenager or adult is part of what fuels their fear of investing. Some millennials are also just old enough to remember the bursting of the dot-com bubble.

Almost 60 percent of millennials distrust financial markets, according to the survey.

“Witnessing this state of the market during formative years of their lives shaped their perceptions, leaving them very skeptical about investing and the markets in general,” Garrett Silver, head of investing products at Capital One ShareBuilder, told CNN.

The millennials who do invest are more likely to do so independently, ShareBuilder found, with 87 percent of them trusting themselves to make investing decisions on their own. That’s compared to 68 percent of seniors.

Younger investors’ fear of investing is causing experts to worry about whether young people are saving enough for retirement, as we reported was the case last year.

“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,” Bankrate chief financial analyst Greg McBride said. “They won’t get there without being willing to assume a little short-term price risk in their long-term money.”

What about you or millennials you know? Do you worry about their investing or retiring? Let us known in a comment below or on our Facebook page.

Find the right financial adviser

Finding a financial adviser you can trust doesn't have to be hard. A great place to start is with SmartAsset's free financial adviser matching tool, which connects you with up to three qualified financial advisers in five minutes. Each adviser is vetted by SmartAsset and is legally required to act in your best interests.

If you're ready to be matched with local advisers who will help you reach your financial goals, get started now.

Read Next
7 Secret Perks of Individual Retirement Accounts
7 Secret Perks of Individual Retirement Accounts

IRAs come with bells and whistles that many other savings and investment accounts lack — including some that you may not know exist.

6 Things That Are ‘Free’ With Medicare
6 Things That Are ‘Free’ With Medicare

These services could save you money and help prevent costly health problems.

11 Expenses to Cut Now If You Want to Retire Early
11 Expenses to Cut Now If You Want to Retire Early

Like the idea of financial independence? Part of the FIRE equation is cutting costs.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Comments

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.