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Personal Finance

What Millennials Are Doing Right—and Wrong—About Retirement

A study finds many younger workers rocking their 401(k)s, but 70 percent still don’t have at least 10 percent deducted from their paychecks.

Millennials may be overly confident about their investing skills, but many are handling their 401(k)s with savvy, a new study (pdf) by Wells Fargo Institutional Retirement & Trust suggests.

More than a quarter of younger workers—28 percent—have at least 10 percent deducted from their paychecks, according to the study. It analyzed the behavior of 4 million employees in the plans the company administers, from 2011 to 2016. Among the older generations, 35 percent of Gen X-ers and 44 percent of boomers were at the 10 percent contribution mark.

Boomers get their own shout-out. If you assume they are the ones earning $100,000 or more, which they likely are, they are the "most improved" group over the study's five years among those who contribute at least 10 percent. There was a 15.3 percent increase among those making $100,000 or more hitting the 10 percent rate.  At the same time, there is a lost opportunity for boomers. Just 7.7 percent of participants 50 and older make the additional $6,000 "catch-up contributions" allowed by the IRS. 

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