The white paper from authors Michael Cembalest, Chairman of Market and Investment Strategy, and Katherine Roy, Chief Retirement Strategist, comprehensively examines how millennials will manage their finances and maintain their financial independence throughout their working years and through retirement.

The research is presented in the format of a fictitious script proposal for a web-based show, "The Millennials," which follows a cast of millennials with different income levels. Sometimes everything goes according to plan and sometimes negative shocks occur, which affect their ability to save, including turbulent markets, widowhood, health problems, job loss, lack of access to a 401(k) and/or employer match, retirement policy changes and other unforeseen life events. Key findings include:

Today's millennials are highly educated, but face headwinds in terms of student debt, global competition for the best jobs, below-trend wage growth and rising pressure on the federal government to curtail the entitlements they currently and will eventually receive.

Millennials are often inclined to hold more cash than prior generations, are less likely to marry or own a home, and will increasingly finance their own retirements due to declining availability of defined benefit pension plans. Given rising life expectancies, their retirements may be longer than their working years.

More than three-quarters of adults in their 50s experience job layoffs, widowhood, divorce, new health problems or the onset of frailty among parents or in-laws, all of which disrupt their ability to save.

The good news: the financial tools needed to deal with these challenges are within reach, provided that millennials use them early enough. How can median-income millennials do it? It starts with a plan to put 4%-9% of pre-tax income into retirement accounts each year, starting by age 25. For affluent millennials, the range would be 9%-14%; and for high net worth millennials, 14%-18%. The rest of the plan is based on additional savings from after-tax income, employer-matching contributions and consistent investment discipline.

"There are many factors involved in depicting these journeys. Some, like family emergencies, and home prices, are outside the control of our millennials, while others, like after-tax saving and spending habits, are completely within their control," said Michael Cembalest. "As we follow them on this journey, their lifestyle choices and the unpredictable forces of financial markets and government policy collide to tell the story of their financial lives, which is more often than not characterized by both triumph and tragedy."

"The way we present these findings is designed to help millennials, as well as their financial advisors, employers and parents, gain a greater understanding of the drivers of financial security in today's rapidly changing world that millennials will inherit," continued Katherine Roy. "Whatever their household income level - median, affluent or high net worth - optimizing 401(k) contributions and after-tax savings, combined with prudent and consistent investing, will help millennials meet their retirement challenge."