Survey: U.S. retirement savings in best shape in years

Americans' retirement savings are in the best shape they've been in more than a decade.

So says a survey by Fidelity Investments, which looked at more than 3,000 working households that have started saving for retirement.

After tallying up how much they're saving in their 401(k) accounts, their expected Social Security benefits and other assets, Fidelity said that the typical saver is on track to have 80 percent of the income they'll need to cover retirement costs. That's the highest score since Fidelity's surveys began in 2005, when it was at 62 percent.

Much of the improvement is due to workers saving more of their pay each year. The typical savings rate is now 8.8 percent, more than double the 3.6 percent rate in 2006. That, though, is still less than the 15 percent of pay that Fidelity and other advisers suggest, including whatever contributions employers make through matching programs.

The surging stock market, which has more than quadrupled since early 2009, has also helped increase the value of 401(k) and Individual Retirement Accounts.

By generation, Baby Boomers are in the best position. Savers born from 1946 through 1964 are on track to have 86 percent of the income they'll need in retirement. They typically save bigger chunks of their paychecks, typically 9.9 percent of income.

Another reason is that they're among the last workers to have wide access to traditional pensions, which guarantee regular payments through retirement.

Later generations have less access to pensions, which makes them more responsible for saving for their own retirement, and for deciding how those savings are invested. Savers born from 1965 through 1980, Generation X, are on track to have 77 percent of the income they'll need for retirement.

For the first time, millennials have surpassed Gen X in Fidelity's retirement readiness score, and they're on track to have 78 percent of the retirement income they'll need. These savers, born from 1981 through 1992, have the benefit of the most time before retirement to allow their investments to grow. They're also typically saving 7.5 percent of their pay.

"Millennials have processed what they've seen," said Ken Hevert, senior vice president of retirement at Fidelity. "They grew up and became adults in the Great Recession. They've seen what not being prepared can do to a family."