The reams of alarming studies and reports about Americans’ failure to save for retirement may not hold true for young workers.

Even though retirement may be an unimagined future for most millennials, they’re still stacking savings in defined contribution plans, according to a Vanguard study.

According to “The Auto Savings Generation: Steering Millennials to Better Retirement Outcomes,” a new Vanguard whitepaper, automatic enrollment and the rise of target-date funds are allowing millennials, aged 18 to 34, to build their nest egg without giving retirement a second thought.

“Automatic plan design features and the rise of target-date funds are reshaping retirement plan outcomes for all generations,” said Jean Young, author of the paper and a senior research analyst with the Vanguard Center for Retirement Research. “However, these innovations are by far having the greatest—and most positive—impact on the retirement savings of millennials.”

Among millennials, participation in 401(k) plans in 2013 was higher than the equivalent age cohort in 2003. In Vanguard’s plans with an automatic enrollment feature, 87 percent of millennials participated in their workplace retirement plan in 2013, an increase of more than 70 percent compared with ten years prior.

Despite two major market downturns during their lifetimes, Millennials have increased their savings over the past two years. Vanguard’s research found that all generations improved their savings rates, but millennials posted the largest gains.

In 2013, the average 401(k) deferral rate for workers aged 18 to 34 was 3.6 percent in voluntary enrollment plans and 4.2 percent in automatic enrollment plans. In 2003, the same age cohort averaged a 3.1 percent contribution rate. Even greater gains were reported in plans offering an employer match.

Vanguard attributed some of the improvement in savings behavior to automatic escalation of savings.

The study also found that:

  • Among 18-to-34 year olds, median equity allocations increased from 82 percent in 2003 to 89 percent in 2013.
  • 64 percent of millennials in automatic enrollment plans are invested in a single target-date fund.
  • Millennials are twice as likely as baby boomers to invest in an all-in-one investment option like a target-date, target-risk or balanced fund.