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Retirement savings: Millennials prefer cash and that could come back to bite them

By Jack Moore

WASHINGTON — When it comes to saving for retirement, millennials say they prefer cold, hard cash, according to a new survey — and that could be a problem for them down the line.

A new Bankrate.com survey found 30 percent of millennials cited cash as their preferred long-term investment option — the only age group that favored cash over the higher-risk, higher-reward stock market.

In contrast, 33 percent of members of Generation X said they preferred the stock market for long-term investments, along with 38 percent of baby boomers and 44 percent of members of the “silent generation.”

Bankrate said millennials’ propensity for cash likely stems from the fact they came of age when the stock market bottomed out in 2008, leading to the Great Recession. However, Bankrate said millennials’ “economic skittishness” could cause them to lose out on a lot of money over the long haul.

A 22-year-old worker who saves 10 percent of her $50,000 salary in a 401(k) and invests only in a money market fund that yields 2 percent would end up with $359,000 by the time she retires at 67, Bankrate said. Conversely, if the worker invests the same amount in a combination of stocks and bonds that yields 8 percent annually, she’d likely wind up with $1.9 million by the time she retires, according to Bankrate.

The good news is that despite what millennials say about their preference for cash, they are not necessarily staying away from the stock market entirely. Most workers in their 20s are being auto-enrolled into retirement accounts consisting of mutual funds containing a mix of stocks and bonds, Bankrate said, citing data from the Employment Benefit Research Institute.

The Bankrate survey, released annually, quizzed 1,000 respondents on their preferred investment option for long-term savings. The survey was conducted in July 2018 and has a margin of error of plus or minus 3 percent.

Overall, nearly a third of respondents — 32 percent — said the stock market is the best investment option. Less than a quarter — 24 percent — said cash is their top preference.

This year, just 22 percent of respondents cited real estate.

For the first time in four years, real estate was not the most favored investment option, Bankrate said.

The Iran war could drive up costs for petroleum-derived products like clothes and crayons

By The Associated Press
NEW YORK (AP) — It might be hard to imagine the Iran war weighing on stuffed toys with names like Snuggle Glove, Bizzikins and Wobblies, but even plush playthings are not immune when oil shipments from the Middle East are constrained. Like many soft toys, the creatures developed by a manufacturer in Fort Lauderdale, Florida, are made with polyester and acrylic, synthetic fibers derived from petroleum. Three weeks after the war started, suppliers in China notified Aleni Brands that getting the materials already was costing them 10% to 15% more, CEO Ricardo Venegas said. “I think this situation demonstrates how much oil permeates throughout our system, and we can’t get away from it,” said Venegas, who founded Aleni Brands last year and is in the process of adding product lines. “Who would have thought that the price of a toy would have a direct relationship with oil?” It's not just toys. Petrochemicals derived from oil and natural gas go into making more than 6,000 consumer products, according to the U.S. Department of Energy. Computer keyboards, lipstick, tennis rackets, pajamas, soft contact lenses, detergent, chewing gum, shoes, crayons, shaving cream, pillows, aspirin, dentures, tape, umbrellas and nylon guitar strings are just a few of them.
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