Most Americans' retirement savings under $25,000

Boomers and younger workers are not saving enough for retirement, a new survey shows, as pensions shrink and the future of Social Security benefits remains unknown.

Elaine Thompson/AP
Boeing technical worker Richard Wichels stacks returned ballots before they go into a machine to be opened and readied for a count Monday in Tukwila, Wash. The union representing 7,400 Boeing technical workers is revoting on a contract that would replace pensions with a 401(k) retirement plan.

The Employee Benefit Research Institute (EBRI) has published its annual Retirement Confidence Survey which confirms what virtually all such surveys have concluded: 1) that Americans are living longer; and 2) that they do not have anywhere near enough saved for retirement.

The sad truth is, Americans do almost no thinking about what kind of retirement they want. They mistakenly assume that Social Security is a retirement program, when in fact it is a supplemental retirement program. The three legs of the retirement "stool"—Social Security, a pension, and private savings—have all seen some shrinkage in the past few years.

For Social Security, all baby boomers know the truth: We are going to be working longer, into our 70s, paying more and getting less. Pensions are going away:International Business Machines stopped providing pensions to new employees a couple years ago, and many are facing reductions in their benefits. (Read MoreCities That Are Most Prepared for Retirement)

And private savings? Let me quote from the EBRI survey: 57 report having less than $25,000 in household savings and investments (excluding their home and pension benefits). This is for all workers, so older workers would have more money, but other surveys show the results are equally paltry.

This is just the tip of the iceberg: American households are so strapped that only half could come up with $2,000 in cash if an unexpected need arose in the next month. (Read MoreChoice for Tight Times: Save More or More Risk)

You would think that savings levels would increase, but no: The percentage reporting saving anything for retirement is at 66 percent, down from 75 percent in 2009.

People are also living much longer than their parents: A male reaching retirement age in 2013 is expected to live to an average of 85, a woman to 87.

What this means: A retirement crisis is looming. In a little more than a decade, there will be a lot of older people who will run out of money. There will be stories written in the year 2025 about Joe Smith, 82, a retired auto worker, living in a flophouse on $2,100 a month in Social Security after his pension was cut off and his personal savings ran out, while his children, in their 60s themselves, moved 2,000 miles away.

(Read MoreWant a Secure Retirement? Move to Slovenia)


1) Housing recovery keeps chugging along: February housing starts came in above estimates. Single-family starts were up 31 percent compared to February of last year, multi-family was up 21 percent. Permits were at the highest levels since 2008, up 34 percent in the last year. January starts were also revised upward. 

Bottom line on housing: All the indicators you should care about are trending up—not just starts, but household formations are trending up, consumer confidence is improving, and inventories of new and existing homes are near record lows. Home builder stocks are up one to three percent.

2) Cyprus: Your guess is as good as mine, but I'll bet that at the end of the day the Cypriots will end up exempting the first 100,000 euros (about $130,000) from taxation, and then tax those with deposits of more than 100,000 euros at some increment above 10 percent—whatever it takes to get to 5.8 billion euros ($7.5 billion) in taxes. Yes, it will risk the ire of the Russian oligarchs and criminal class, and yes there will be a hit to the financial services sector and some capital flight. This ruling, should it happen, will further curb fears of contagion.

(Read MoreCyprus Bank Levy Unlikely to Pass Parliament)

3) Copper is at a seven-month low, but that's not a big surprise: Copper tends to track perceptions on China. This year, the SPDR S&P China is down 7 percent, copper futures are down 7.1 percent.

4) Thanks for the advice: With the market at historic highs, does it not amaze you how many analysts have suddenly turned bullish? I know this is a cliche—everyone turns bullish at a top—but really: In the past couple days, analysts at Goldman Sachs, ISI, and Morgan Stanley have all upped their 2013 S&P 500 targets to 1,600 and above. Yesterday, Meredith Whitney said this was the most bullish on equities she has been in her entire career.

5) AmerisourceBergen is set to open at an historic high, while Walgreen is poised to open at a 52-week high after the two companies signed a 10-year distribution deal. Under the pact, Walgreen will buy its branded and generic drugs from wholesaler ABC, delivering a blow to Cardinal Health—down 8.7 percent pre-market—which used to provide branded drugs to Walgreen. This is the second time in two years ABC has stolen business from Cardinal Health: ABC replaced Cardinal Health as Express Scripts' wholesale drug provider last year.

Walgreen reported better-than-expected second-quarter earnings of 96 cents, beating analysts' estimates by two cents. Same-store sales and traffic declined, but the pharmacy filled more prescriptions, while customers upped their basket.

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to