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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173 Comments

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Robert

Retire outside the US. You have options people!

September 27 2011 at 12:43 PM Report abuse rate up rate down Reply
Morris Cantonitis

Overdue For a Correction
That is.
Not our markets.
It’s the wall alley pigletts & Red Plague dUE for a CORRECTION and correctional facility;
and like no facility on this EARth
Yes Indeed.
Pursuit of EVIL Man in 2011, 201x, 201 & u will c what it brings u.
Storms RIP thru America.
EVIL begets EVIL in 2011, 201x, 201
What is an insider?
Werare333 and weareinsiders.
Yes. A pre press, pre printed release details wall alley & Red Plague PIGG daarck path.
U r on WANTED posters in Christ Kingdom baaaad piglets.
Satan conjures THE WORLD and Puts parts IN Place and takes Bounties ON ALL that CALL.

July 08 2011 at 9:37 PM Report abuse rate up rate down Reply
frank1946

Do Not Retire.............very simple ! Keep going to Work !

For the Ladies, buy a new dress, lose 15 lbs. !

For all the rest, Vote Tea Party !

July 06 2011 at 8:31 AM Report abuse rate up rate down Reply
Gumby

Rednecks are fixin' to get tax cuts from Republicans so to support their PickUp guzzling gasoline at 11 mpg!

July 05 2011 at 2:38 PM Report abuse rate up rate down Reply
1 reply to Gumby's comment
savemycountry911

Welfare bums are gonna get free money from the Dems just to vote for them.

July 05 2011 at 8:47 PM Report abuse rate up rate down Reply
ump495

i guess i am one of the lucky ones. i worked for the federal govt for 40 years, counting my military, and i retired with almost 80% of my $100.000 yearly salary. not bad. you see the govt pays approximately 2% a year for each years service of your high three salary upon retirement. i have been retired since jan 2 1998. house paid for, no bills and wife also draws pension and social security. am i bragging. no. just proud that i used my head in planning for my retirement years. you have to plan on retirment early in your working ages and stick to it, whether its a tsp or 401k or whatever. if you dont take care of your own self. dont count on the government to bail you out when you get older.
and for you younger generation i can only sympathize with you becasue the way thiings are going i actually dont know what you have to look forward to. you better start putting some aside in a sock or you will also be on welfare.

July 05 2011 at 7:57 AM Report abuse rate up rate down Reply
danzillo4

Anyone ever hear of a politician who had money problems!!!

July 05 2011 at 6:40 AM Report abuse rate up rate down Reply
danzillo4

Politicians not included...Between their self voted government benefits, their "side earnings" their's and their wives seats on corporate boards, their non-profits that recieve (substancial funds) from "government sources"...we know why they fight so hard to get elected and re elected....Fight and LIE, and LIE and fight...another no brainer..."opensecrets.org" will wake some up...look at the site....

July 05 2011 at 6:36 AM Report abuse rate up rate down Reply
challes2000

If where you work offers a 401k it is positively the best investment you can make toward your retirement. Even if you choose your 401ks safest investment getting 0% interest your still making at least 20% because they take the money from your paycheck before tax. Not to mention many companies will match you for the first 4% you invest....

July 04 2011 at 9:58 PM Report abuse +1 rate up rate down Reply
west hammond

the ABC's of independently living and financially diversified boomer retirement. A. pick one of the large affordable 8 or 10 desirable american cities that supports the boomer lifestyle (I like Stapleton-Denver or Fitzsimons-Aurora Colorado). B. buy a potentially desirable bottom-priced 2 or 3 bedroom quality foreclosure single family home that someone else at least partially remodeled located near a newly developed economic engine such as a medical center ($1B+) ( this inventory varies by locale but my subject area is near a large under-construction VA hospital and subject homes cost 80K) c. ride the 50 year wave of price stability that accompanies locating adjacent to cooperatively developed multi-billion dollar public service and private enterprise projects.

July 04 2011 at 6:36 PM Report abuse rate up rate down Reply
angler725

Sadly, the Church I attended 2 decades ago sponsored 7 people from E. Europe and enabled them to immigrate to the U.S. We covered all expenses and set them up with housing and essentials. We held their hands. Every last one of them found out about Welfare and and immidiatly took advantage of the Congregation and of the U.S. system. Their unofficial spoksman was at least honest when he said," why work, we get paid for staying home"?

July 04 2011 at 3:42 PM Report abuse rate up rate down Reply