Generation Y investors are losing faith in their retirement prospects, according to a study by MFS Investment Management.
In an October 2011 survey, 59% of investors between the ages of 18 to 30 agreed that, "Over the past few years I’ve lowered my expectations about the quality of life in retirement.” That number is up 15 percentage points from June of last year as economic uncertainties continue to weigh on the minds of a majority of young investors.
“The youthful optimism we would like to believe this generation possesses has been stymied by a decade of economic challenges, market volatility, and prolonged unemployment," according to William Finnegan, senior managing director and director of U.S. retail marketing for MFS.
While Generation Y, which still has over 35 years on average to plan for retirement, recorded the largest increase in pessimism, Generation X, baby boomers, and mature investors also reported a more pessimistic outlook. On average, 49% of all investors surveyed were less hopeful about retirement, compared to 44% who shared this sentiment in June 2011.
The challenge for financial planners, says Finnegan, is to build younger investors’ confidence in the future and build relationships that will allay short-term fears for the sake of long-term financial security.
The online survey took into account the responses of 929 individual investors with $100,000-plus in household investable assets.
Mason Braswell writes for Financial Planning.