Kristin Compton, Writer
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Millennials are likely to retire with more ease than their parents, according to a recent study.

The J.D. Power 2018 Group Retirement Satisfaction Study found that millennials are best prepared for retirement. In fact, their readiness tops that of their parents’ age group, collectively known as baby boomers.

Key findings include:

  • Over half (51 percent) of millennials have set specific retirement goals compared with only 44 percent of both Gen X and boomer participants
  • 83 percent of millennials with specific retirement goals believe they are already on the right track to meet those goals
  • 61 percent of millennials have at least $25,000 in retirement savings

The results from this study come as great news for the often misunderstood generation that can’t remember a time when their phone wasn’t mobile and the computer didn’t serve as an alternate tool for socialization.

But it has its limits. The study is based on responses from more than 9,500 who are already group retirement-plan members, a sign of financial literacy.

Still, in a world where Social Security funds and pensions are uncertain, and prices are rising while wages remain largely stagnant, retirement is becoming more of a fleeting concept for some.

Study: Most Boomers Haven’t Saved Enough

This study presents less-than-stellar news for boomers as they quickly approach retirement. Experts recommend saving 10 years’ worth of income for retirement.

Although 75 percent of boomers have $100,000 in savings, that’s probably not enough.

“The average Boomer will hit age 65 with just 3.4 years of current income saved, far short of the 10 years some experts recommend,” the study said.

In contrast, about 27 percent of millennials have saved more than $100,000 for retirement.

They still have a good 30 to 35 years left in the workforce. That’s another three decades or so of savings to compound.

Starting at age 25, saving $3,000 a year in a tax-deferred retirement account for just 10 years can result in a surprisingly large payout, as illustrated by CNN Money.

By the time that early investor turn 65, he or she would have accumulated nearly $340,000 with an approximate 7 percent return.

Millennials Swayed by Peers Pick Annuities

Millennials might have substantially more time than boomers to take risks in their investment ventures. But a 2016 study found that the majority of this younger age group may be interested in low-risk options.

The study was a project for a financial institution carried out by students from Yale School of Management.

Initially, interviews of 31 millennials showed that the younger generation had little knowledge about retirement investments, particularly annuities. This age group felt disconnected from activities that did not offer an instant return or gratification.

But after access to a larger participant pool of both young and old, and with a bit of explanation for the study’s more youthful counterparts, millennials seemed to change their tune about the low-risk, guaranteed-return investments.

This was especially true for those given a reference point who believed they may currently be contributing less than others.

Interestingly, millennials were most likely to be influenced by their peers’ choice of annuity funds. Even without knowing anything about the fund, if millennials were aware of others’ choices prior to making their own decision, they would mostly resolve to follow suit.

Current salary was also found to impact millennials’ overall stance on retirement savings as well as options undertaken by retired loved ones.

Please seek the advice of a qualified professional before making financial decisions.
Last Modified: May 19, 2020

3 Cited Research Articles writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

  1. J.D. Power. (2018, May 24). Millennials are Better Prepared for Retirement than Their Parents, J.D. Power Finds. PR Newswire. Retrieved from:
  2. Sarti, F. (2016, March 16). How Much Are Millennials Engaged in Retirement Annuities? Yale School of Management. Retrieved from:
  3. CNN Money. (n.d.). Ultimate guide to retirement: When should I start saving for retirement? Retrieved from: