Falling Short for Retirement
A report from the National Institute on Retirement Security entitled 'Millennials and Retirement: Already Falling Short,' further contributes to our collective understand of how vast the nation’s retirement crisis has become. The analysis finds that 66 percent of working Millennials have nothing saved for retirement, and the situation is far worse for Millennial Latinos. Among Latinos, about 5 in 6 Millennials who are working have nothing saved for retirement. The report further indicates that a bit more than a third of Millennials actually participates in employer-sponsored retirement plans despite the fact that two-thirds of Millennials work for employers offering such plans.
Many financial experts recommend that Millennials set aside 15 percent of more of their salary for retirement, a much higher rule of thumb than for prior generations. But researchers found that the average retirement savings rate for Millennials, including the matching contributions of employers, is about 10 percent. That savings rate is primarily driven by a relatively small group of Millennials who are saving a lot for retirement. The study concludes that only five percent of working Millennials are saving adequately for retirement. This helps explain why two-thirds of Millennials, who face higher life expectancy and are less likely to have a traditional defined benefit pension, are concerned about outliving their retirement savings. More than 9 in 10 of these young workers agree that the nation’s retirement system is stressed.