The majority of Americans have great dreams for their retirement, but according to the Employee Benefit Research Institute’s (EBRI) 16th annual Retirement Confidence Survey, those might as well remain dreams, because most people are just not saving enough to meet even a fraction of their retirement expectations. In fact, according to the survey, many Americans have only accumulated modest retirement savings; underestimate the share of their pre-retirement income they are likely to need in retirement; and have made no estimate as to how much they will need to live once they retire.

Problems will arise not only from the amount that people are saving, the survey says, but also due to inadequate provisions for rising healthcare costs, increased longevity, and unrealistic income replacement ratios. Making matters worse, most workers also have planned for far more expensive lifestyles than their current savings patterns would allow.

While the key indicators of retirement planning have held steady in recent years (the number of workers saving for retirement continues at 70%, and those who report having attempted to calculate their savings needs for retirement holds steady at 42%), more than half of workers saving for retirement report total savings and investments, not including the value of their primary residence or any defined benefit plans, of less than $50,000. More alarming, though, is that the large majority of workers who have not put money aside for retirement have little in savings at all: According to the survey, three-quarters of these workers say their assets total less than $10,000.

That said, the RCS survey also found that one-quarter, or 24%, of workers it profiled are very confident about their financial security in retirement, and more than four in 10 (44%) are somewhat confident. But at least some of those who say they are very confident may be overconfident, the survey warns, as 22% of very confident workers are not currently saving for retirement, 39% have less than $50,000 in savings, and 37% have not done a retirement-needs calculation.

EBRI’s 2006 Retirement Confidence Survey