Bleak retirement outlook for workers under 30

While older Americans haven't saved nearly enough for a comfortable retirement, those under 30 should be in better shape. After all, they still have enough time to build an adequate nest egg.

But they're going to have to save a lot harder.

Only half of workers between the ages of 18-30 who are eligible to save in a company-sponsored 401(k) plan is doing so, according to a review by Aon Hewitt, a benefits consultant.

Younger 401(k) participants also set aside less of their paychecks (5.3 percent) that those aged 31 to 45 (6.8 percent) or Boomers over 46 (8.4 percent). Only 60 percent of under-30 savers take full advantage of the matching funds provided by employers, which is the most compelling reason to join a 401(k).

Unless their savings rate rises, the under-30 generation is destined for the same bleak retirement outlook as the generations closer to retirement. The study estimates that, at present savings rates, some 80 percent of workers under 30 will come up short when they hit retirement age.

Even when they do begin to build a nest egg, a majority of 20-somethings can't seem to keep their hands off it. Some 60 percent cash out their 401(k) plans when they change jobs. Not only do they face penalties for early cash-outs, they miss out on the biggest advantage available to younger savers: the decades of compound interest they'll earn if they keep their savings intact.

To make matters worse, younger workers will have fewer alternatives to fall back on. Since the 1970s, when Boomers were getting started in the work force, employers have eliminated or sharply scaled back traditional pension plans and medical benefits that millions of Boomers can look forward to. Projected shortfalls in Social Security benefits will likely force some cuts in those benefits in the coming decades.

Workers in their 20s today can also expect a longer life span, which will likely mean they'll need more money to pay for those extra golden years.