According to a recent study conducted by the National Institute on Retirement Security, 66% of working millennials – those born between 1981 and 1991 – have nothing saved for retirement.
The study also points out that just 5% of working millennials are saving as much as financial experts recommend. The recommendation is 15% to 22% of salary, twice the amount recommended for previous generations.
It’s not all bad news, of course.
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A separate Bank of America survey says one out of every six millennials currently has at least $100,000 in savings.
Even better, 47% of millennials said they had at least $15,000 in savings.
Of course, that still reinforces the idea that more than half of all Americans in their 20s and early 30s have nothing saved at all.
That was confirmed by a third study conducted by Go Banking Rates last year. It showed almost half of Americans between 18 and 34 without any type of savings at all.
And that percentage was actually UP from 31% in 2016.
So it’s basically a tale of three different tiers:
1. A small cadre of very committed wealth builders…
2. A medium-sized group at least trying to put something away on a regular basis and…
3. A very big pile of “save nothings.”
That mirrors what we’ve seen in other generations.
For example, consider the Employee Benefits Research Institute’s 2017 Retirement Confidence Survey.
Among the workers surveyed, only 18% said they were very confident about their retirement prospects.
The percentage of workers feeling at least “somewhat” confident about their retirement prospects actually declined from the previous year.
And 47% of workers who answered the question, said the total value of their household’s savings and investments – excluding a primary residence and any defined benefit pension plan – was less than $25,000.
Even more disturbing: 24% said they had less than $1,000 saved. Among the group without access to a retirement plan, the number shot up to 67%!
Stop and think about that.
There are something like 75 million Americans without access to a workplace retirement plan right now, which means there are roughly 50 million Americans with less than $1,000 saved for their golden years.
Add in all the workers who DO have retirement plans – but only minimal balances – and you’re talking about tens of millions more that are severely unprepared for comfort in their old age.
Several years ago, the NIRS reported that:
“The collective retirement savings gap among working households age 25-64 ranges from $6.8 trillion to $14 trillion, depending on the financial measure.
“A large majority of households fall short of conservative retirement savings targets for their age and income based on working until age 67. Based on retirement account assets, 92% of working households do not meet targets.
“Under broader measures, most households still have insufficient assets: 90% fall short based on retirement account balances and estimated DB pension assets combined, 84% fall short based on total financial assets, and 65% fall short based on net worth.”
Considered as a single group, meaning all Americans regardless of their individual access to retirement plans…
The median household retirement account balance was a meager $3,000 and among households age 55-64 with at least one person working, two-thirds had accumulated less than they earned in a year.
These are dire numbers, especially when you consider Social Security’s financial problems as well as the simmering pension crisis I wrote about recently.
What to do?
Well, when it comes to retirement planning, my philosophy is “better to have saved too much than too little.”
That’s why I aim to sock away the absolute maximum allowed by law into retirement tax shelters every single year.
I figure the worst case is I find myself with more money than my wife and I need in our old age. And whether I blow the excess on luxuries or leave it all to my daughter, that will be a fine problem to have.
Likewise, I make sure I keep up on all the latest tips, tricks, and retirement strategies – not just for my own benefit but for YOURS.
Because the reality is that retirement planning is a huge topic, and all of us have different needs and desires.
In the end, the important thing is staying vigilant and always looking to continue learning and building your wealth – something that the vast majority of Americans clearly AREN’T doing.
This article originally appeared on The Daily Reckoning.