Millennials and Gen X Have Different Savings Goals

August 1, 2014 ( – Retirement plan sponsors should recognize that different age groups have different financial priorities and investment outlooks, according to Cogent Reports, a division of Market Strategies International.

By Kevin McGuinness | August 01, 2014
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Cogent’s “Emerging Investor Trends” study looked at affluent (having at least $100,000 in investable assets) Generation Y/Millennial and Generation X investors. Linda York, vice president of Cogent Reports, tells PLANSPONSOR, “More Millennials feel optimistic about the investing environment (47%) than their Gen X counterparts (26%). In terms of overall financial priorities, for the Gen Xers it’s saving up for and funding their retirement. For Millennials, their priorities are saving to make a major purchase or just saving in general, though not with a specific aim of retirement.”

Millennials also have shorter-term goals when it comes to saving, she says, such as paying off debt or purchasing a home.

The Cambridge, Massachusetts-based York adds, “Forty-four percent of Millennials are investing in low-risk investments, which is a higher percentage than their Baby Boomer counterparts. Gen Xers, on the other hand, seem to have a higher tolerance for investment risk. Almost half (43%) are investing in moderate-risk investments and over one-quarter (27%) are investing in high-risk investments.” Part of the difference, she explains, is that since Gen Xers are not saving for shorter-term purchases, they have a longer time horizon to work with and more room to recover from risk-generated losses.

Another difference between Millennials and Gen Xers is where they are putting their money. More than one-third of Gen Xers (36%) are investing their savings in employer-sponsored retirement plans, allocating the most they can to them, while more than one-quarter of their Millennial counterparts (26%) are keeping their assets in bank accounts.