Young investors get it. When it comes to retirement planning, for example, they are, according to Spectrem Group research, most likely to think it is important to have a firm understanding of various investment products. A majority (59.5) deem it “very important” to have a grasp on the actual amount of money they will need to retire comfortably. They are also most likely (19.1 percent) to believe it is important to have a professionally prepared retirement plan.
But with more of their lives ahead of them, the economy stumbling on (hopefully) its way to recovery, the solvency of Social Security and Medicare in jeopardy, and the national debt rising, they can be forgiven for taking personal concerns more to heart than older investors.
Chief among these is having enough money set aside for retirement, which concerns 63 percent of Mass Affluent investors overall, but 71 percent of investors ages 54 and under. While 56 percent of investors overall are concerned about being able to retire as planned, 66 percent of young investors identify this as a key concern.
Other concerns that most plague the youngest investors: Financing the education of their children (49 percent), an increase in interest rates (55 percent), the loss of their job or their spouse’s job (51 percent) and being able to meet short-term obligations such as mortgage payments (30 percent). Investors under 55 are also more likely than their older counterparts to be concerned about the amount of debt their household currently carries (40 percent).
The age group most likely to identify “taking risk” as the key factor in obtaining their wealth is characteristically the least likely to feel it is more important that they protect their principal than grow their investments and most likely to be willing to take a significant investment risk to earn a high return on their investments.
Indeed, as is also characteristic of the young, there is a spark of optimism to ameliorate their concerns. Sixty percent—versus 46 percent overall—said that they expect their financial situation will be stronger by next year.