Elise Amendola/AP
- Millennials are keeping their savings in cash rather than investing, a new survey has shown.
- They've parked a third of their retirement funds in cash, rather than stocks or bonds.
- Both asset classes plunged last year but stocks are now rallying, with investors readying for a potential Fed pause.
Millennials are keeping a third of their savings in cash and shunning investing, according to a new survey.
Asset management firm Schroders polled a group of workers aged between 27 and 42 and found that on average they'd allocated 33% of their retirement funds to cash – compared to putting 31% in stocks and 16% in bonds.
Both of those asset classes plummeted in price last year as the Federal Reserve's aggressive interest-rate hikes made it more attractive for people to park their funds in savings accounts.
But the millennials who've pivoted to cash are now missing out on a broad stock-market rally, with the tech-heavy Nasdaq Composite jumping 16% and the benchmark S&P 500 up 7% in 2023 as investors position for when the central bank halts its interest-rate increases.
Millennial workers also get more advice about investing from their families than from websites, publications, or financial advisors, according to the Schroders' survey.
They believe they'll need around $1.3 million worth of savings to live comfortably after they've stopped working – but just 29% think they'll have stashed more than $1 million by the time they retire.
Schroders also surveyed older Americans and found that they've positioned their portfolios more boldly than the younger generation.
Workers aged over 45 allocate 31% of their savings to stocks, 29% to cash, and 16% to bonds, according to the investment firm.
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