Stung by two bear markets in the last decade, it's understandable that investors are still wary of dropping money into the stocks, but members of Generation X are playing it especially safe, SmartMoney reports.
Analyzing data from several investment companies and research groups, SmartMoney concluded that Americans in their 30s and early 40s are taking an increasingly conservative stance when it comes to stocks. That could spell trouble in future years if they neglect to adequately fund their retirement savings plans.
Consider these numbers:
- Members of Gen X had just 48 percent of their 401(k)s in equities at the end of 2009, down from 55 percent in 2007, according to the nonprofit Employee Benefit Research Institute.
- Nearly 20 percent of Gen Xers don't have any stocks in their 401(k)s, and 19 percent have less than half in equities, a survey by consulting firm Aon Hewitt found.
- About 56 percent of Gen X households might not have enough in savings to maintain their current standard of living in retirement, according to an EBRI report.
- The average Gen X investor contribute just 4 percent of each paycheck to retirement savings, according to Vanguard. Most financial advisers recommend at least 10 percent.
Interesting statistics, for sure, but with the economy still on shaky ground and the fact that most portfolios have seen basically flat returns over the last decade, can you really fault the MTV generation for its reluctance to invest in Wall Street?