Millennials are BETTER prepared for retirement than Boomers thanks to surge in auto-enrolment schemes, new study finds

Millennials are on track for a better retirement than their elders thanks to an increase in the number of auto-enrolment schemes in the workplace, a new study has found.

This cohort is known to have fallen behind previous generations in terms of homeownership and income, but new analysis suggests they may be gaining in terms of retirement savings.

Research by asset manager Vanguard analyzed what share of income Americans could continue to generate after retirement – based on their current savings and Social Security benefits.

It found that “early millennials” – people between the ages of 37 and 41 – could cover 60 percent of their salaries, while baby boomers and Generation X would only have about half their salaries. For the purposes of the study, Boomers were categorized as people between 61 and 65 years old and Generation X as people between 49 and 53 years old.

Essentially, a millennial earning $50,000 is on track to have a retirement income worth $30,000 per year. By comparison, a Boomer with the same wage would be on track to earn $25,000.

The findings reveal the benefits of auto-enrollment, which had become more mainstream by the time millennials entered the workforce.

As a result, they have typically had longer to save in their 401(K)s compared to older generations.

Vanguard researcher Fiona Greig said: ‘While many portray younger generations as facing more barriers to saving for retirement, this research shows that Millennials and Generation contribution plans that encourage saving and investing in age-appropriate asset allocations. ‘

The data analyzed the retirement savings of different income groups. Workers in the 50th percentile – those earning a median income of $42,000 – were on track to earn between 50 and 58 percent of their current salary in retirement.

Millennials in the 95th income percentile – meaning they earn an average salary of $173,000 – were the best prepared for retirement. These individuals were on track to earn 85 percent of their current salary after leaving work.

Kevin O’Leary (pictured) revealed how much earners should invest in their 401(K) each year to ensure a comfortable retirement

Across all generations, only those in the highest income bracket were on track to meet all their spending needs.

The findings come as experts repeatedly sound the alarm about America’s so-called “retirement crisis” as workers fail to save enough for their later years.

Last week, Shark Tank star Kevin O’Leary urged workers to save at least 15 percent of their income. He reasoned that someone with a salary of $60,000 would have saved one and a half million if he retired using this strategy.

“The number is 15 percent,” he said during an appearance on Good Morning America’s Swimming with Sharks.

And for those who think they don’t have enough cash, O’Leary had a message: ‘Stop buying all that crap you don’t need. You have to adjust your lifestyle so that you put fifteen percent aside.’