Younger employees were found to be using the same asset allocation strategies as their older counterparts, with Gen Y using a similar asset mix (50% stock, 35% bond/annuity and 15% cash) as Gen X and Baby Boomers. In addition, more than half (55%) of all higher education employees surveyed say they consider themselves to be “beginners” at investing — including seven in 10 Gen Y (71%), half (50%) of Gen X and half (51%) of Baby Boomers.
“Time until retirement is one of the biggest factors that should be considered when determining asset allocation,” said John Ragnoni, executive vice president, Fidelity Tax-Exempt business. “While we recognize many investors are feeling cautious in these uncertain markets, the asset mix of a participant with decades until retirement should look very different from that of someone who is on the verge of tapping into his or her retirement savings.”
When it comes to tools and resources used to learn about retirement savings, the survey shows Baby Boomers rely mostly on guidance from financial professionals (42%) and employer-provided education materials (37%). In contrast, Gen X relies primarily on educational materials from employers (37%) and online websites (36%) and Gen Y relies more on friends and family (54%) and online planning tools (41%).
More than six in 10 (63%) respondents in Fidelity’s Education Generational Survey said they are concerned they will not be able to live comfortably in retirement.
When asked to describe their personal plan for retirement, less than a quarter (24%) indicated they had a formal plan in place. Even among Baby Boomers, only 27% said they had a formal plan. Forty-six percent of respondents said they will delay retirement or never retire at all. The likelihood of delaying retirement was even greater among faculty, with more than half (54%) indicating they will delay retirement or never retire. This trend was even higher among older faculty, with 68% saying the same.
"Having a personal plan for retirement is more important than ever," said Ragnoni. "This is especially true among boomers closest to retirement. Fidelity has helped millions of Americans transition from saving for retirement to creating a paycheck in retirement. For employers, helping employees prepare for retirement is essential to faculty and staff renewal."
The survey of approximately 600 higher education employees assessed retirement saving and investing behavior across three generations, Generation Y (ages 21-32), Generation X (ages 33-46) and Baby Boomers (ages 47-65).