Even though the stock market is booming and the economy continues to grow, the 2008 financial crisis is having a lingering effect on many young adults' willingness to take risks.
The problem, say financial advisors, is that it's causing an entire generation to potentially miss out on huge gains in their retirement portfolios.
"A lot of them took risks. They stretched to go to grad school with loans, found themselves without a job or took on debt to buy homes with nonconventional mortgages, with the promise that their homes would appreciate, but they didn't," said Barry Glassman, a certified financial planner and president of Glassman Wealth Services. "The message they got is that risk doesn't always work."
A Bankrate.com report released in July showed that Americans age 18 to 29 are more likely to choose cash as their favorite long-term investment over any other age group. In fact, 39 percent said cash was their preferred way to invest money not needed for 10 years or longer.
The report pointed out, however, that the S&P 500 Index had gained 17 percent over the previous year, while cash investments generally were garnering returns below 1 percent.