The Great Recession has left its mark on everyone, it seems, and there’s now evidence it has dramatically changed how baby boomers and millennials save for retirement.

According to a survey from MFS Investment Management, boomers and millennials are each doing what the other should be doing when it comes to planning for retirement. Boomers are aggressively trying to build assets, while millennials are trying their best not to lose what they have, looking for income rather than growth.

Among boomers, 32 percent say that growth is their No. 1 consideration when making decisions about retirement assets, while among millennials, 60 percent are focused on other things: capital-protection (29 percent) and income-generation (31 percent).

Advisors’ recommendations would be exactly the opposite, with 55 percent of advisors under the impression that boomers should still be looking for “income and preservation, not growth,” while also believing that younger investors should have more than half their retirement assets in equities.

However, only 28 percent of boomers agree with advisors, while millennials only have about 30 percent of their assets in equities. Instead, they’re heavily into cash (23 percent), which advisors peg at 6 percent.

On average, the boomers surveyed by MFS hold 40 percent of retirement assets in equities, with cash at 21 percent and bonds only 14 percent. Millennials, on the other hand, average 17 percent in bonds and only 30 percent in equities.

Perhaps not surprisingly, the boomers are much more worried about being able to retire when they originally thought they could (51 percent) and 37 percent have reported lowering their expectations about life in retirement. Half view their biggest threat is a drop in the stock market, and only 45 percent think they’ve managed to balance their portfolios correctly.

“Boomers appear desperate to rebuild their nest egg before retirement, with significant equity exposure in the face of a compressed investment time horizon,” said Doug Orton, vice president of business development for MFS. “Millennials, even with time on their side, would rather preserve what they have and avoid the market.

“We are concerned,” he continued, “that investors — boomers and millennials alike — are maintaining asset allocations inconsistent with their true risk tolerances and investment time horizons.”

Instant Insights /

Recession changes how boomers, millennials save for retirement

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