RetirementTake your pretax income -- say it's $60,000 -- and imagine living on less than two-thirds of it: $38,400. Now cut that by more than half to $18,000 a year. Are you ready to retire on that? Without Social Security, that will be the reality for millions of Americans.

The average American household will be living on only 30% of their current income in retirement if Social Security disappears, according to a new study from Putnam Investments. They interviewed nearly 3,300 working Americans about their retirement savings and plans and found that each the average household is on track to replace only 64% of its current income in retirement, factoring the government program, The study also showed that the Americans who are best prepared for retirement are those who participate in 401(k) savings plans.

Do you contribute to your 401(k) plan?
Yes3656 (79.7%)
No930 (20.3%)

While the statistics are daunting, do you really understand how retirement accounts like 401(k)'s work? DailyFinance columnist Loren Berlin conferred with the experts to give you an easy-to-follow rundown in The Ins and Outs of Retirement Accounts, Part 1: The 411 on 401(k)s.

Also See: Social Security: Why Seniors Are Just Plain Mad

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