The generation most on track to having the recommended 80 percent replacement income in retirement is the youngest one saving for it, according to a Wells Fargo study that examined millions of 401(k) retirement plan participants over five years.
Wells Fargo found that while baby boomers still save more and contribute higher percentages to their retirement plans, millennials are ahead in some measures. Millennials are on track to replace 78 percent of their income at retirement, versus 62 percent for Gen Xers and 51 percent for baby boomers. Millennials also have more diversified retirement savings portfolios than older generations, the study found.
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None of the generations studied overall hit the recommended 10 percent minimum salary contribution to retirement savings, but baby boomers are contributing the most with an average of 8.7 percent. And in terms of making up for lost time, only about 8 percent of workers age 50 or older are taking advantage of catch-up contributions that allow them to boost their savings as they close in on retirement age.
Wells Fargo Advisors is a trade name used by Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC, Members SIPC, separate registered broker-dealers and non-bank affiliates of Wells Fargo & Company.