Gen Y workers in higher education retirement plans tend to be as conservative as their older counterparts a Fidelity survey released Monday found. Fidelity surveyed approximately 600 higher education employees and found that Gen Y, Gen X and boomer workers share similar asset allocation strategies.
The 2011 Higher Education Generational Survey, conducted by Versta Research for Fidelity, found that Gen Y workers typically allocate 50% of their portfolios to stocks, 35% to bonds or annuities and the remainder to cash. By comparison, baby boomers’ typical allocation was 47% to stocks, 39% to bonds or annuities and 14% to cash.
John Ragnoni, executive vice president for Fidelity’s Tax-Exempt business, cautioned against such conservative strategies for young investors.
“Time until retirement is one of the biggest factors that should be considered when determining asset allocation,” he said in a statement. “While we recognize many investors are feeling cautious in these uncertain markets, the asset mix of a participant with decades until retirement should look very different from that of someone who is on the verge of tapping into his or her retirement savings.”
Overall, nearly half of respondents said they are conservative investors and 55% said they are “beginners” at investing. Gen Y workers were especially likely to describe themselves as beginners (71%), while similar percentages of boomers and Gen X workers were likely to do so (51% versus 50%).
Sixty-three percent of respondents said they were concerned that they would not be able to live comfortably in retirement, and 60% are concerned about having enough for long-term care. Forty-seven percent say they are concerned about having enough for medical needs. Just one-quarter say they are concerned about paying for basic living expenses.