The personal finance hub NerdWallet recently published a report that concluded that millennials will need to save 22 percent of their income for retirement. You could hear the collective gulp.

The core of the argument is that slower economic growth will lower expected stock market returns to 5 percent, down from the average annual return of 7 percent since the 1950s. Compounded over a lifetime, 2 percentage points adds up into real money.

A couple of people have asked what I thought. My reply was count me among the skeptics. For one thing, as columnist Walter Updegrave emphasized, the calculation doesn't consider Social Security.

For another, forecasts like this are notoriously uncertain. Remember Business Week's famous cover story from 1979, "The Death of Equities?" The 1980s and '90s bull market started in 1982. How about 1999's "Dow 36,000," co-authored by James K. Glassman and Kevin A. Hassert? Oops.

"There is no predestined rate of return, only an expected one that may not be realized," Laurence Siegal wrote when he was director of research for the investment division at the Ford Foundation.

More importantly, savings and retirement aren't synonymous. Millennials probably should set aside 20 percent of income, but much of the money should be held outside retirement accounts. Retirement is only one transition, although a big one. Others include quitting a job, changing careers and starting a family.

Critically, saving allows for putting money to work in the most valuable investment available to the average person: Improving their human capital. The return on human capital investment shows up in higher earnings and greater job satisfaction, among other things. For instance, despite the high cost of college the benefit of a bachelor's degree still averages 15 percent, according to economists at the Federal Reserve Bank of New York. That's more than double the average annual return to stock market investments since 1950.

"Fact is, modest investments in human capital for those in their early careers can create dramatically more economic value than even long-term compounding of savings in a Roth IRA," said Michael Kitces, director of research at Pinnacle Advisory Group.

I would add that changes in the economy suggest people will want to continue those "modest investments" way past young adulthood. With savings you have freedom to invest in your education without taking on debt or to change jobs and careers.

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