A new study reveals a concerning outlook for the Millennial generation’s retirement savings. The majority of Millennials have no retirement savings, and those who are saving aren’t putting away nearly enough. The report highlights several factors contributing to these challenges, including low wages and limited access to employer-sponsored retirement plans.

The analysis found that 66 percent of working Millennials have no retirement savings, with the situation being particularly dire for Latino Millennials, of whom 83 percent have no savings.

This research, conducted by the National Institute on Retirement Security (NIRS) and authored by Jennifer Brown, a research manager at NIRS, details these findings. The report also includes seven policy recommendations to help Millennials improve their retirement outlook.

Despite the fact that two-thirds of Millennials work for employers offering retirement plans, only a little over one-third actually participate in these plans. The gap is largely due to eligibility requirements set by employers, which exclude 45 percent of working Millennials, rather than workers choosing not to save.

Financial experts suggest that Millennials should save 15 percent or more of their salary for retirement, a higher standard than for previous generations. However, the average savings rate among Millennials, including employer contributions, is just ten percent.

Two-thirds of Millennials worry about outliving their retirement savings. Furthermore, more than 90 percent believe the current retirement system is under stress and requires reform. The report suggests that expanding retirement plan eligibility for part-time workers and increasing default contribution rates are potential solutions to improve the retirement outlook for Millennials.

The overall situation for Millennials, especially Latinos, is challenging. However, it is important to note that when eligible, 90 percent of Latino Millennials contribute to a retirement account. This reflects their commitment to saving for the future. Samantha Vargas Poppe, associate director at Unidos Policy Action Center, emphasized the importance of retirement plan access and eligibility, noting the significant challenges that remain.

Key findings from the research include:

– Two-thirds (66.2%) of working Millennials have no retirement savings. The situation is worse for working Latino Millennials, with 83 percent lacking savings.

– Only five percent of working Millennials are saving adequately for retirement, according to financial experts’ recommendations.

– Even though two-thirds (66%) of Millennials work for an employer that offers a retirement plan, just over one-third (34.3%) actually participate.

– There is a notable gap in retirement plan participation among different racial and ethnic groups. Only 19.1 percent of Latino Millennials and 22.5 percent of Latinas participate in employer-sponsored plans, compared to higher rates among other groups, such as 41.4 percent of Asian men and 40.3 percent of White women.

– Four out of ten (40.2%) Millennials cite employer-set eligibility requirements, like minimum hours worked or tenure, as reasons for not participating in a retirement plan.

– Despite these challenges, more than nine out of ten eligible Millennials across all racial and ethnic groups participate in employer-sponsored retirement plans.

Millennials face unique challenges, including longer life expectancy, lower income replacement from Social Security, and less access to traditional pensions. As a result, they must save significantly more than previous generations to maintain their standard of living in retirement.

The Millennial generation, born between 1981 and 1991, is the largest and most diverse generation in the U.S. However, the structure of the defined contribution retirement system favors high-income workers and increases disparities along gender, racial, and ethnic lines, making it difficult for most Millennials to achieve a secure retirement.

This generation has also faced economic hardships, including low wages, high unemployment, and major shifts in the American economy. Millennials will need to save more than their predecessors to address these unique retirement challenges.

The report is based on an analysis of data from the 2014 Survey of Income and Program Participation (SIPP) by the U.S. Census Bureau. It examines the challenges posed by the current retirement system for working Millennials aged 21 to 32, focusing on access to and participation in employer-sponsored retirement plans, barriers to participation, and the adequacy of Millennials’ retirement savings.

To improve Millennials’ retirement prospects, the report offers several policy recommendations:

1. Expand retirement plan eligibility for part-time workers. About 25 percent of Millennials are not eligible for employer-sponsored retirement plans due to their part-time status. Reducing the 1,000-hour requirement under the Employee Retirement Income Security Act (ERISA) could make more part-time workers eligible.

2. Reduce waiting periods for workers to join employer-sponsored plans. Allowing new employees to contribute to retirement plans immediately could significantly boost Millennials’ savings rates.

3. Increase automatic enrollment. Studies show that automatic enrollment in retirement plans greatly increases participation, especially among Millennials. Implementing automatic enrollment could improve their savings rate.

4. Increase employer matches and default contribution rates. Financial experts recommend that Millennials save 15 percent of their salary, but only five percent currently meet this target. Employers can help by increasing matching contributions and default contribution rates.

5. Educate Millennials about employer matches. Many Millennials are unaware of the benefits of employer matches. By providing clear information and examples, employers can encourage more Millennials to take full advantage of these benefits.

6. Promote and educate Millennials about the Saver’s Credit. This tax credit is intended to encourage retirement savings among moderate- and lower-income earners but is underutilized. Educating Millennials about this credit could provide additional tax benefits for retirement savings.

7. Protect and strengthen Social Security. As Millennials face potential reductions in Social Security benefits, it is crucial to address funding issues to ensure this important source of retirement income is preserved.