It's difficult to get a firm read on the retirement readiness of Generation Y. They're highly confident, according to State Street Global Advisors, whose research shows 82% of Gen Yers (age 25 and younger) are sure of their ability to retire comfortably.

Oh no they're not, concludes the Employee Benefit Research Institute. EBRI's surveyed age bracket skews older (25-34), but it finds the youngest workers only two percentage points more assured of retiring in the lifestyle of their choice than the population at large.

What's more, EBRI finds that Millenials are the least likely to have faith in Social Security's ability to continue providing benefits. Yet, LIMRA data show Generations X and Y both are woefully uninformed about retirement options and offerings; more than half of those consumers 'fess up to having minimal or no knowledge about investments and financial products.

So, who's right?

Part of the problem with nailing down Generation Y on retirement is that no one has actually nailed down Generation Y. Various analysts have used birth dates starting from 1982 to 1980 (and in some cases, even the late 1970s) going through 1999 or 2000, or possibly as late as 2004. This means large swaths of the generation won't even be entering the workforce for at least another decade.

For all intents and purposes, however, Millenials are your youngest workers, and that's where Fredrik Axsater, senior managing director and global head of defined contribution plans for State Street, focused his most recent research. He says that "28% of the 18- to 25-year-olds are very confident, and that's twice the rate of the general population," but that confidence springs from faith in their employers, a trust that plan sponsors need to be sure is not misplaced.

"Their experience today has been largely automated, more so than other investors," Axsater says. "They're auto-enrolled, their rate is set, and their portfolios are diverse. More so than other investor age groups, they feel a shared responsibility with their employer that they are in this together."

And because Gen Y feels that it is being taken care of, Axsater says, "employers are incredibly powerful because of that shared responsibility." Benefits managers "are well-positioned to help these young investors so that they indeed are on the right track, so they are able to retire when they want and have the type of retirement that they want to have," he adds.

Catherine Theroux, director of public relations for LIMRA, says that plan sponsors aren't doing enough to lead in this area. The average savings rate for a Gen Y employee who's been in the force for four to six years, she says, is 6%, "and that's well-below what we would advise or suggest." One in five Millenials only contribute 3% or less.

"There are some big trending reasons behind that," Theroux says. "They came into the workforce under a severe recession, many of them are underemployed with significant college debt.

They're facing such economic challenges that they may think, 'Oh, I'll just save it later,' but it's hard to make up those years when you don't save. If you're 40 and you're just starting your saving, it's hard to catch up to those people who started at 22."


'It stresses me out'

Still, young savers, like everyone else, can only work with what they have. "Mary," 29, is a Washington, D.C.-based senior associate with a national retail chain. She has an MBA from the University of Virginia, and she has met personally with a financial adviser, but she tells EBN she is "not very" confident that she will have enough to live comfortably throughout retirement and "not at all" confident that she is doing enough to prepare, in part because of her employer's benefit offering.

"They offer a 401(k) plan with minimal contribution, and I am not eligible for one year," she says. Mary's been with her company for nine months.

"I plan to eventually enroll, but I will weigh my outside options before joining, given the minimal contribution my employer makes," she continues. "Becoming more fiscally responsible is one of my goals for this year. Having recently finished grad school and started paying student loans plus starting a new job, I am allowing myself a few months to sort out a reasonable budget and savings plan. However, I do feel behind in my planning, and it stresses me out."



Covering the basics

On the other hand Bradley, a 26-year-old Brown University graduate and director of digital at Weber Shandwick in San Francisco, says he is contributing 6% to his 401(k) and getting an employer match. "They provide a lot of reminders, but don't automatically opt us in," says Bradley, who adds he is "somewhat" confident in his retirement savings.

"I have an accountant and a financial adviser, but that's largely because they're my parents' accountant and adviser," he says. "My employer offers an automatic 401(k) optimizer that I believe uses a real person at JP Morgan; I was skeptical, but when I started using it I got much better returns.

"I'm trying to set myself up with a good base to save for retirement, without letting it be a huge concern at this point. I want to make sure that I've got the basics - like a 401(k) - covered, and when I have a bit more flexibility in my budget I can think about contributing more."

Bradley believes his confidence in his retirement preparation is around average. One thing he definitely has in common with others in his age group - he thinks he'll be retiring later, leaving him with another 40-plus years in the workforce.

"I'm not sure when I'll retire, but I know that it will likely be in my 70s rather than my 60s," he says. "If medical technology advances enough, perhaps I'll never retire!"

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