How unready are we for retirement?

It’s quite a day. The market’s tanking because it’s expensive for Spain to borrow. The New York Times is launching a new project digging into middle class decline.

It’s only a short stroll, then, to some grim, newly published data showing many of the folks near retirement have little savings beyond Social Security.

The Schwartz Center for Economic Policy Analysis writes:

Despite the growing tax breaks and intensive advertising campaigns for retirement accounts ‐‐ most of which are 401(k) plans and Individual Retirement Accounts (IRA) ‐‐ Americans ages 50‐64, 58 million of them in 2010, will likely not have enough retirement assets to maintain their standard of living when they reach their mid‐sixties.

The addition of a weakening labor market for older workers means we are headed for a retirement income security crisis. Three quarters of near retirees (ages 50 to 64) have annual incomes below $52,201, with an average total retirement account balance of $26,3952.

Individuals with incomes over $52,201 per year have more in their retirement accounts, but their balances are not high. Their average retirement account balance for this income group is $105,012.

The data’s led one New School researcher to conclude the system of voluntary retirement accounts has been a disaster.

Teresa Ghilarducci argues for “guaranteed retirement accounts on top of Social Security. These accounts would be required, professionally managed, come with a guaranteed rate of return and pay out annuities.”

Her essay doesn’t provide detail on how the accounts would be administered or how the money would be spent. And, of course, Americans don’t like being told what to do.

“You don’t like mandates? Get real,” she says. “Just as a voluntary Social Security system would have been a disaster, a voluntary retirement account plan is a disaster.”

— Paul Tosto

(h/t Carpe Diem blog)