According to a new report from the National Institute on Retirement Security (NIRS), millennials are falling short when it comes to saving for retirement.
The key findings of this report are as follows:
1. 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.
2. Using the recommendations of financial experts, only five percent of working Millennials are saving adequately for retirement.
3. 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.
4. 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.
5. 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.
6. 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.
Reports like this fascinate me. If you look closely at the conclusions, you see excuses and blame. While it is convenient to have an employer plan and an employer match is a great help, you don’t need an employer plan to save for retirement. You can set up automatic saving using a traditional or Roth IRA. Heck, you can even invest periodically in municipal bond mutual funds to generate current and future tax-free income. Where there is a will there is a way.