A retirement in poverty?

From the Motley Fool: “You won’t retire because you can’t”

Instead of traditional pensions, most of us now have 401(k) plans at our jobs. But in general, we're not making sufficient use of them. According to the CRR, "Median 401(k) assets, including IRAs, for workers in their 50s are just $60,000."

Think about that. If you have $60,000 socked away at age 50 and it grows by the market average of 10% annually until you hit 65, it will grow to about $250,000. You might make some additional contributions along the way, but even so, that's not so much to live off of in your golden years -- particularly considering that you're only supposed to withdraw 4% per year from your savings in order to make them last. At that rate, your retirement savings are kicking out just $10,000 per year to you. Not good.

Of course, most retirees will have other assets to draw upon, most likely a primary residence. Still, considering that corporate pensions can disappear (think United) and Social Security is lurching towards bankruptcy, Americans would do better to err on the side of caution.