New Research Finds 95 Percent of Millennials Not Saving Adequately for Retirement

A new report from the National Institute on Retirement Security (NIRS) estimates that most millennials are not saving enough for retirement, and 66.2 percent of working millennials have nothing saved. Meanwhile, about 83 percent of Latino millennials have nothing saved. Only a little more than 33 percent of this generation participates in employer-sponsored plans even though 66 percent work for companies offering retirement plans. The eligibility requirements set by employers, which keep 45 percent of working millennials out of plans, drives this coverage chasm rather than workers opting not to save for retirement. "Financial experts recommend that millennials set aside 15 percent or more of their salary for retirement, which is a much higher rule of thumb than recommendations for previous generations," says NIRS' Jennifer Brown. "But we find that millennials' average retirement savings rate, including employers' matching contributions, is 10 percent of their salary." Millennials face higher life expectancy and lower income replacement from Social Security, and are less likely to have a traditional defined benefit pension. This requires them to save significantly more than previous generations to maintain their standard of living in retirement. NIRS recommends improving millennials' retirement prospects in a number of ways, such as by expanding defined contribution plan eligibility for part-time employees, reducing waiting periods for workers to qualify for employer-sponsored plans, boosting auto-enrollment, raising employer matches and default contribution rates, supplying education to increase awareness of the benefits of employer matches, promoting and educating millennials about the Savers Credit, and safeguarding and bolstering Social Security.