In my series this week about retirees working through retirement I told you first that 79% of retirees expect to keep working in retirement, but many find out that they cannot. Then I told you that 73% of Americans 50 and over are planning to delay retirement altogether. Now I’m turning the focus away from America’s Baby Boomers, previously the nation’s largest generation, to Millennials who are now America’s largest generational cohort.
Millennials are people born between 1981 and 1991 (though definitions vary). They are well educated, but thanks to a variety of factors, they are getting a slow start to retirement savings. The National Institute on Retirement Security recently did a study called Millennials and Retirement: Already Falling Short. Here are the main findings:
- Two-thirds (66.2%) of working Millennials have nothing saved for retirement. This situation is far worse for working Millennial Latinos, as 83 percent have nothing saved for retirement.
- Using the recommendations of financial experts, only five percent of working Millennials are saving adequately for retirement.
- Even though two-thirds (66%) of Millennials work for an employer that offers a retirement plan, only slightly over one-third (34.3%) of Millennials participate in their employer’s plan.
- There is a significant gap between Millennial Latinos and other racial and ethnic groups in terms of participation in employer-sponsored retirement plans. Only 19.1 percent of Millennial Latinos and 22.5 percent of Latinas participate in an employer sponsored plan, compared to 41.4 percent of Asian men and 40.3 percent of Millennial White women, who had the highest rate of participation in a retirement plan.
- Four out of ten (40.2%) of Millennials cited eligibility requirements set by employers, such as working a minimum number of hours, or having a minimum tenure on the job, as a reason for not participating in a plan.
- Hope for improvement for this generation stems from the fact that across all racial and ethnic groups, more than nine out of ten Millennials actually participate in employer-sponsored retirement plans, when they are eligible to participate.
You read that right, only 5% of Millennials are saving adequately. And 66.2% have nothing saved at all. That’s bad news for most of an entire generation of workers.
So what will happen when Millennials, who maybe think they’ll work through retirement meet the realities I discussed in the first two parts of this series? To catch up, Millennials may not be able to enjoy the standard of living their parents were accustomed to.