BOSTON (TheStreet) -- The younger generation and Baby Boomers may not agree on music, clothing and tech gadgets, but they share at least one thing: investment strategies.Learning from the pain of their elders as they come of age in a time of financial turmoil, younger generations -- from the so-called millennials to generations Y and X -- are increasingly risk-averse when it comes to investment portfolios and retirement plans. "For many families, the recent financial crisis and its ongoing challenges are certain to lead to long-term issues," says Yuval Bar-Or, an adjunct professor of finance at Johns Hopkins University's Carey Business School and an expert on decision-making in the context of risk. "Shunning equities could mean much slower wealth formation, as historically equities have outperformed other asset classes over long periods of time." For decades, retirement planning has been a two-tiered strategy. Phase one: While young, a long time horizon affords the greater risk tolerance needed to jump into equities and accelerate the accumulation of wealth. Phase two: As you grow older, scale back stock-market gambles and look to preserve and protect savings. These days, that conventional wisdom is frequently flipped. Blessed with longer life spans but cursed by growing health-care costs, persisting debt and entitlement uncertainty, retirees are seeing the need to continue an "accumulation" phase well into the autumn of life. The younger set, especially those ages 18 to 30, are conversely displaying a conservative approach. For those in their 20s, "they've witnessed the stock market drop 55%, climb 88% and drop again in a short span," is an explanation offered by Vanguard Chairman and Chief Executive Officer Bill McNabb in a recent speech. Those in their 30s, if they have invested in equities for the past decade, have seen the stock market return essentially zero percent. The most recent Merrill Lynch Affluent Insights report, a quarterly survey of 1,000 participants with $250,000 or more in investable assets, found that half describe themselves as having a minimal tolerance for risk. Breaking down that pool of respondents, a greater percentage of younger individuals ages 18 to 34 describes their risk tolerance as low (52%) than do investors ages 35 to 50 (45%) and those 51 to 64 (46%). The only age group with a comparable low-risk tolerance are those ages 65 and older (55%). The survey found that when it comes to investing, 46% of affluent individuals say they are more conservative today than they were a year ago. This jumps to 56% among investors ages 18 to 34, the highest percentage among all age groups. "It is understandable that younger investors who have experienced or witnessed the market swings during the past decade and the impact they may have had on their family would be skeptical about more moderate or aggressive investment strategies," said Sallie Krawcheck, president of Bank of America's ( BAC) global wealth and investment-management unit. Merrill Lynch is the brokerage unit of Bank of America. Krawcheck, during a conference call last month to discuss the survey's findings, presented this evolving investment philosophy as potentially damaging to long-term security. "Not investing at all or keeping to a more conservative approach at a younger age can be detrimental to asset growth sought over longer time horizons," she said, urging financial advisers "to help restore investor confidence so that risk aversion doesn't leave the next generation of investors inadequately prepared for the future." Though the Merrill Lynch survey focused exclusively on the affluent, that demographic is likely setting the trend for peers in their age group. Retirement plan participation typically corresponds with having greater income, something many younger workers, mired in a tight and frugal job market, have yet to achieve. How America Saves 2010, a Vanguard report, found that only 52% of employees with incomes of less than $30,000 contributed to their employer's direct-contribution plan last year, compared with 89% of employees with incomes of more than $100,000. Participation rates were lowest for employees younger than 25, with only 45% making voluntary deferrals. Deferral rates last year were also the lowest for participants younger than 25, and they saved, on average, only 3.8% of income. The rate for those ages 55 to 64 were more than twice greater, averaging 8.6%. -- Reported by Joe Mont in Boston.