Sobering study shows that half of all Americans have virtually no savings

Broken pink piggy bank with scattered pennies

One of the best annual surveys of our saving habits shows a staggering number of Americans are headed for an impoverished retirement.

When added to what we've learned from earlier studies, I think we can safely conclude that the shift to do-it-yourself retirement isn't working out for us.

Individual Retirement Accounts and 401(k) plans are simply not going to provide most workers depending on them with the same safety and security as traditional pension plans.

The study I'm referring to is from the Employee Benefits Research Institute. Its "2012 Retirement Confidence Survey" interviewed 1,003 workers and 259 retirees at every income level.

The institute found that most of those respondents have virtually no savings at all.

About 60% reported less than $25,000 in total savings and investments (excluding the value of their homes and traditional pension plans).

About 30% said they have less than $1,000 in total savings.

It also found that fewer people are putting money away for retirement.

The percentage of respondents who said they are saving anything at all fell from 75% in 2009 to 66% in 2012

Given that trend, it's not surprising that only about half of the survey's respondents said they feel "very confident" or "somewhat confident" that they'll have enough money to enjoy a comfortable retirement.

How do they expect to cope with that lack of savings?

By working longer.

A record 26% of those surveyed now expect to work until they're 70 or older, up from 16% just five years ago.

Indeed, there has been a significant change in when workers expect to be able to retire over the past couple of decades.

Back in 1991, when most workers still thought private or public pensions would support them in their old age, 84% expected to retire by age 65.

That included a significant 19% who thought they'd be able to kick back and take it easy before they turned 60.

But over the past 20 years, corporate America has been pushing workers out of traditional defined-benefit pension plans into defined-contribution retirement plans such as 401(k)s and IRAs.

Now only 50% expect to retire by age 65, and a mere 8% think they'll have enough money to do so prior to 60.

Taken together, this would certainly seem to suggest that do-it-yourself retirement isn't working quite as well as its supporters would lead us to believe.

I can see where pushing all of the responsibility and risk onto employees is good for employers.

But I have yet to see a study that suggests this has been good for workers.

Even those who have been diligent savers have seen their retirement plans beaten down by stock market bubbles and recessions.

A new study that blogger Ingrid Case wrote about earlier this month found that nearly half of us are dying with less than $10,000 in assets.

Sure, defined-contribution plans are portable. You can take the money in a 401(k) plan with you when you change jobs, something their corporate champions tout as a major benefit.

But is it really that much of an advantage when the great majority of workers have almost nothing in them?

Now we can debate the reasons Americans aren't saving more and what that might say about the nation's moral character.

But here's the fact we've got to come to grips with: Depending on defined-contribution retirement plans is going to leave us with a lot of very poor senior citizens.

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