Half of Americans Have Less Than $2,000 Banked for Their Golden Years

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Scott Thill
With declining earnings and a culture of borrow-and-consume, America's workers face a future of uncertainty and little money to pay for their retirement.

The days of quietly retiring with a nest egg built up from years of savings from a long career on the verge of disappearing. For tens of millions of Americans, facing rising costs, shrinking incomes and growing debts they already have disappeared.

"One out of three working Americans does not have retirement savings beyond Social Security, and about 35% of those over 65 rely almost totally on Social Security alone," Dallas Salisbury, president of the Alliance for Investor Education and the Employee Benefit Research Institute (EBRI) , explained to AlterNet. "Of the remaining two-thirds of working Americans that have some retirement savings, 27 percent report less than $1,000, 16 percent between $1,000 and $9,999, 11 percent between $10,000 and $24,999, 12 percent between $25,000-$49,999, and 36 percent $50,000 or more." Perhaps the most shocking number is that half of Americans have $2,000 or less saved for retirement.

Crunch the numbers and you end up with a retirement myth, rather than a money-maker. We face a colder economic reality: Not only are there no astronomical retirement returns coming down the financial pike, but what nuts and nest-eggs families have set aside for their futures have been mostly sucked dry.

"Individuals need to follow the advice of the ages," said Salisbury. "Spend less than you earn by 25 percent, and save for your future. This keeps your lifestyle from getting ahead of your income."

While saving 1/4 of our shrinking incomes sounds nigh on impossible in this economic climate, many are watching their savings getting squandered by bad fund managers. One retirement Ponzi scheme starting to worry the Senate Special Committee on Aging, according to an aide who asked not to be named, are target-date funds, a financial instrument . They're basically mutual funds that try to play equities and stocks in their early years before settling into more conservative investments like cash and fixed-income before maturing, so as not to give their investors heart attacks on the date of their retirement. More...