If you didn't save for retirement when young, is it too late?

I gave several talks to Pine City high school students about money some two decades ago. The experience was memorable. They wanted to know more about saving for retirement. Not exactly what I expected. The students had jobs (mostly at fast food restaurants) and they said the employee bulletin board encouraged saving for retirement. Their parents were also suggesting they put some earnings into an IRA.

The Pine City experience reinforces the message in recent data from Vanguard, the mutual fund company. Millennials are doing so better at saving for retirement than GenXers and boomers at comparable ages. For example, Vanguard estimates that millennials at the 50th income percentile will be able to generate sustainable retirement income equal to 58% of their pre-retirement earnings.

Among the reasons millennials are in better financial shape highlighted by the report is the innovation of putting retirement savings on autopilot. Over the past two decades we've witnessed the rise of automatic enrollment, automatic escalation of savings rates with time, and the automatic investment of savings in balanced portfolios.

Saving for retirement when young is terrific. That said, I want to push against the sentiment that if you didn't start saving early, you're in deep trouble by the time you reach your midlife years. True, you can't go back in time. But there's no reason for despair, especially among parents.

The reason is parents have more disposable income when the kids are gone. Take this illustration from the Center for Retirement Research at Boston College. Assume a married couple raising two kids and earning $100,000 annually. They're contributing 6% of salary to retirement savings. When the kids have launched their careers, the couple could set aside 18% of earnings into retirement savings

To be sure, the scholars find parents on average don't take advantage of being empty nesters to boost savings. Instead, they work one to two fewer hours a week. They gain time, but total household income also declines by about $2,500, according to Center's study, "Do Households Save More When the Kids Leave? Take Two."

Nevertheless, the valuable financial option is there for the taking. Empty nesters can greatly improve their financial circumstances later in life even if they didn't start saving for retirement early in their careers.

Chris Farrell is senior economics contributor, "Marketplace"; commentator, Minnesota Public Radio.