How will retirement saving change by 2050? Prospects for the millennial generation

A member of Metro Bank's staff poses for a photograph in the vault of their new branch in Slough, southern England May 3, 2013. This is the only bank in the United Kingdom that has a drive-thru facility. Metro Bank, which launched in 2010 as Britain's first new high street lender for more than a century, saw customer numbers surge in 2012, benefiting from the unpopularity of the established banks.  REUTERS/Eddie Keogh (BRITAIN - Tags: BUSINESS) - LM1E95310CJ01
Editor's note:

This working paper was originally published as part of the Peter G. Peterson Foundation’s US 2050 Research Projects

In How Will Retirement Saving Change by 2050? Prospects for the Millennial GenerationWilliam G. Gale, Hilary Gelfond, and Jason Fichtner consider prospects for retirement saving for members of the millennial generation, who will be between ages 54 and 69 in 2050. Adequacy of retirement saving preparation among current and near-retirees is marked by significant heterogeneity, a characteristic that will likely hold for Millennials as well. In preparing for retirement, Millennials will have several advantages relative to previous generations, such as more education, longer working lives, and more flexible work arrangements, but also several disadvantages, including having to take more responsibility for their own retirement plans and marrying and bearing children at later ages. The millennial generation contains a significantly higher percentage of minorities than previous generations. The authors find that minority households have tended to accumulate less wealth than whites in the past, even after controlling for income, education, and marital status, and the difference appears to be growing over time for black households relative to whites. Whether these trends persist is central to understanding how the Millennials will fare in retirement.

Read the full working paper.