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Source: Federal Reserve Bank of New York.

The United States may be the greatest country on Earth, but when it comes to saving money, we're no better than average. Based on the latest data from the St. Louis Federal Reserve, the U.S. personal savings rate is just 4.8%. While that's up from the sub-2% saving rate we touched in 2005, it still pales in comparison to the saving rates of many other developed countries, like France and Germany.

Our poor saving habits are having potentially dangerous consequences as workers head toward retirement. A recent survey conducted by Employee Benefits Research Institute showed that less than a quarter of working Americans (22%) feel "very confident" that they'll have enough money come retirement. On the flip side, a frightening 64% admit that they are behind in their retirement savings.

But are things really as bad as EBRI's survey would suggest? According to a study released in June by T. Rowe Price, it really depends on when you were born.

Older is not necessarily wiser when it comes to preparing for retirement
A common misconception about Americans' personal savings habits is that millennials -- generally anyone born between 1981 and 1997 -- are poor savers who spend frivolously. However, T. Rowe Price's report points indicates just the opposite when millennials are compared to the baby boomer generation (Americans born between 1946 and 1964).

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Source: Flickr user ITU Pictures. 

According to the Retirement Saving & Spending Study released in June, which analyzed answers from more than 1,500 millennials and over 500 baby boomers, millennials are outpacing baby boomers in many aspects of saving and investing for retirement. The study paid particular attention to 401(k) contributions and respondents' ability to budget and save.

Specifically, the study notes that 40% of millennials have increased their 401(k) savings this year, compared to just 21% of baby boomers. Both figures are a bit disappointing, considering that the maximum 401(k) contribution rose $500 to $18,000 in 2015, so if workers had been maximizing their 401(k) contributions, we could have expected to see a greater increase from both age groups. Still, the takeaway is clear: Millennials are doing a much better job of setting themselves up for success come retirement.

Millennials also had quite the edge over baby boomers when it came to prudently managing their money. The study shows that three-quarters of all millennials track their expenses carefully, with 67% reporting that they stick to a budget. Additionally, 88% of millennials surveyed said they do a pretty good job of living within their means, with two-thirds saving "by any means necessary." By contrast, just 64% of boomers claim to track their expenses carefully, while only 55% stick to a budget.

Why we are seeing this shift
Why are millennials seemingly better prepared for retirement than boomers? While T. Rowe Price's study didn't go too far into answering this question, there are likely multiple factors at play.

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Source: Social Security Administration.

To begin with, T. Rowe Price's study did point out that 60% of millennials surveyed believe Social Security will be bankrupt by the time they retire. If millennials don't believe they'll have a monthly benefit payment waiting for them in their golden years, then they'll be more likely to stick to a budget and save for retirement. As a side note, it's worth pointing out that this is possibly the biggest Social Security myth. Despite forecasts from the Social Security Administration that the Trust will exhaust its cash reserves by 2033, the SSA can extend the survival of the program through 2087 by cutting benefits by 23%. No one is exactly thrilled about the idea of reduced benefits, but this 80-year-old financial lifeline for American retirees, disabled persons, and survivors of workers will be there for you when you retire.

Secondly, wage growth has been weak for decades. Based on data from the Pew Research Center, real wages (i.e., wage growth with inflation factored in) rose by a meager 7.8% between 1964 and 2014. Meanwhile, many important expenses (e.g., college tuition and medical costs) have handily outpaced wage growth over that time. This lack of substantive wage growth means millennials need to be especially smart with what they earn and focus on putting their money into investment vehicles that give them the opportunity to outpace inflation and generate real wealth.  

Lastly, I suspect millennials' saving habits could also be a function of witnessing their parents grow up in what can be referred to as the "credit generation." For nearly half of today's boomers, based on the recent findings of Allianz Life, credit cards are viewed as a necessary lifeline. However, only about a third (32%) of boomers pay their credit card balance off each month. That sets boomers up for a potentially devastating credit crunch in retirement -- a crunch that I believe millennials are well aware of and want to avoid.

Regardless of the differences between millennials and boomers, there are steps that all generations should consider taking to make saving and investing for retirement a success.

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Source: Social Security Administration. 

All generations should focus on these solutions
A few simple individual changes, and one important shift in the workplace, can go a long way toward putting the American worker back on track for retirement.

Within the workplace, statistics show that employers that automatically enroll employees in their 401(k) plans have higher participation rates than those that don't. Instead of placing the onus on workers to enroll, employers are requiring workers to take the step of opting out if they don't want to participate.

The latest study from Hearts & Wallets shows that between 2010 and 2014, the percentage of businesses using automatic enrollment in employer-sponsored retirement plans (ESRPs) increased from 57% to 68%, while the number of businesses with an ESRP participation rate above 80% concurrently rose from 50% to 64%. Though millennials might prefer a higher matching 401(k) contribution from their employers, it seems the smartest thing employers can do to demonstrate their concern for workers' financial well-being is to automatically enroll them in a company-sponsored 401(k).

On an individual level, it's critical that more people stick to a monthly budget. It's impossible to maximize your ability to save for retirement if you don't understand the basics of your personal cash flow. This isn't to say that your budget can't be adjusted from time to time. No one ever said your spending habits have to be set in stone for all eternity. However, getting a feel for your spending patterns compared to your income will give you a better idea of how much you can afford to put toward retirement accounts on a monthly basis.

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Source: Financial Industry Regulation Authority. 

Finally, it's important that the financial literacy of all generations is improved. For instance, millennials may be doing a better job than boomers at saving for retirement, but a recent five-question quiz from the Financial Industry Regulatory Authority that covered very basic financial concepts showed that only 24% of millennials answered four or five questions correctly (considered a passing grade). In short, basic financial literacy is lacking, and that's bad news if we expect workers to be in charge of their financial future.

How do we improve the financial literacy of Americans? That's one of the toughest questions to answer, but my suggestions would involve workers taking the responsibility to seek out information that's readily available online these days; communities and local organizations working together to spread financial know-how; and schools stepping up their game to teach basic financial concepts at an age when students are still impressionable.

There's no reason why the average American worker can't get his or her retirement back on track. What steps do you see yourself implementing to become a better saver and investor? Feel free to share them in the comments section below.

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Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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