NEW YORK (TheStreet) -- It's clear the earlier you start saving, the more your money grows, a combination of compound interest (the rate of money growing over time as long as it stays invested), and the longer-term ability to be aggressive with investments -- because even if the stock market works against you over a short period, you have plenty of time to recover when you're in your 20s or even 30s.
It's the same with retirement investing: Older Americans prefer more conservative investments, because they don't want to lose the money they've accumulated, while younger investors go heavily into the stock market because they want to accumulate more assets over their working years.
But that script has been flipped with a study from Bankrate.com shows it's actually the youngest American adults (18- to 29-year-olds) who are most likely to choose cash as their favorite long-term investment, not retirees or near retirees.
That's a big problem, says Greg McBride, a certified public accountant and Bankrate's chief financial analyst, because younger Americans "have the biggest retirement savings burden and won't get there with low-yielding cash investments."
"The preference for cash and aversion to the stock market among young adults is very troubling considering this age group has the biggest retirement savings burden," he says. "They won't get there without being willing to assume a little short-term price risk in their long-term money."