Will millennials be able to retire before age 80?
A new report from the Insured Retirement Institute (IRI) and the Center for Generational Kinetics features some good-news, bad-news results when it comes to this oft-talked about generation and the state of their retirement.
“The research found that millennials are not nearly as prepared as they need to be, with some notable exceptions, and the findings show that if we don’t act now to prepare millennials for retirement, they may reach retirement age and have no option but to keep working well into their 80s,” the report, released on Monday morning, states.
The study, which was conducted in August, is based on a survey of 1,110 Americans age 18 to 65, with a 10% oversample of millennials, those aged 20 to 37.
The study does, however, debunk several of the common myths that millennials — at 80 million members, the largest generation — are not saving for retirement.
According to the study, 68% of millennials are currently saving and investing for retirement.
Jason Dorsey, chief strategy officer and lead millennials researcher at the Center for Generational Kinetics, called this finding “shocking.”
“The story out there is that millennials aren’t thinking about retirement at the very least,” he said during a conference call presenting the research results. Adding, “To discover that 68% of millennials – or two-thirds – are actively right now saving and investing was really kind of a shocking stat.”
Dorsey expects that some of this may be helped by the auto-enrollment features utilized by many 401(k) plans – of which 48% of millennials report having a 401(k), according to the study.
Dorsey thinks the percentage of millennials in a 401(k) is “much higher than people would have guessed.”
“Part of what we think is happening there, we don’t have the actual data to back it up, but our suspicion is as employees have been auto-enrolled in 401k plans … we do think that is what’s leading that number being so high,” Dorsey said during the conference call.
While the study debunks the myth that millennials are not thinking about retirement, the study confirms that millennials are not actively planning for retirement.