Millennials’ retirement savings confidence is based on assumptions that will put a financial strain on many of them, according to a survey by Capital Group. The Wisdom of Experience Investor Survey found that although 74% of the 20-somethings to almost-40-somethings in this demographic expect to achieve their retirement goals, they’re underestimating their needs by quite a bit.
Almost half say they’ll only need $500,000 to retire comfortably, the survey found. Even with that low target, only 33% have saved more than $50,000.
Millennials, Gen X and Boomers were represented roughly equally. Millennials reported higher levels of confidence than other generations surveyed. Just 20% of Millennials expressed doubt that they would have enough for a comfortable retirement by the time they stopped working, compared to 38% of Gen X and 28% of Boomers.
Source: Millennials Underestimate Retirement Needs – 401K Specialist
QUINNSCOMMENTARY 
As Yogi Berra was reputed to have said:
– The future ain’t what it used to be.
– Making predictions is difficult, especially about the future.
And, my favorite about predictions: Russians who lived through the Soviet era all believe that predicting the future isn’t so difficult. However, they all confirm that what’s impossible is to predict Soviet/Russian history.
Who among you predicted 2020? How about the Great Recession? The stock market recovery last/this year?
What life expectancy should a Millennial use in estimating retirement needs? For those who reach age 65, what period of retirement should be assumed? What earnings assumption should they build into their projections, what annuity purchase rate? How bout Social Security, Medicare …benefits, taxes, premiums in retirement, whatever …
And, isn’t life expectancy for females who will reach retirement ages (age 65?) in the 2nd half of the 21st Century unknowable? Simply, if she reaches age 65, isn’t she just as likely to live to be 100 as she is to die prior to age 80 (assuming the status quo trends from now until then)?
Every estimate will be wrong.
More importantly, 43% of American adults have $0 saved for retirement (Millennials, Gen X, Boomers) and the median savings is < $15,000. Millennials think they'll need $500,000? That's more than 2.5 times the savings Baby Boomers have accumulated.
Keep in mind that everyone tends to incorporate the status quo in their prediction efforts. However, Americans age 52 had an average of 12 different employers according to the Department of Labor, Bureau of Labor Statistics. So, what good is an estimate based on the status quo for a 20 something.
Better to develop savings habits, spending discipline than to make wildly inaccurate predictions about the future that will need to be updated every year. .
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I’m afraid the low estimate and lack of concern may be indicative of the fact that many of them assume that the government will pay for everything by raising taxes on the “wealthy”.
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