The average working household has virtually no retirement savings, according to a new report by the National Institute on Retirement Security.

Taking data from the 2010 Survey of Consumer Finances from the U.S. Federal Reserve, Nari Rhee, manager of research for NIRS, examined the retirement readiness of working-age households.

Her report, “The Retirement Savings Crisis: Is it Worse Than We Think?” analyzed workplace retirement plan coverage, retirement account ownership and household retirement savings as a percentage of income and estimated the shortfall in working families’ savings compared to financial industry recommended benchmarks.

Some of her key findings:

  • Account ownership rates are closely correlated with income and wealth and more than 38 million working-age households, or 45 percent, do not own any retirement account assets. Those who do have retirement accounts make double the income and have five times the non-retirement assets of those who don’t have retirement accounts.
  • The average working household has virtually no retirement savings. Rhee estimated that the median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households. Two-thirds of working households ages 55 to 64, with at least one earner have retirement savings less than one times their annual income, which is far below what they need to maintain their standard of living in retirement.
  • The collective retirement savings gap among working households ages 25 to 64 ranges from $6.8 trillion to $14 trillion, depending on the financial measure. She found that a large majority of households fall short of conservative retirement savings targets for their age and income based on working until age 67.
  • Public policy can play a critical role in putting all Americans on a path toward a secure retirement by strengthening Social Security, expanding access to low-cost, high quality retirement plans, and helping low-income workers and families save. The report pointed out that Social Security, which is the cornerstone of most people’s retirement funds, could be strengthened and the government could make it easier for businesses to sponsor defined benefit pension plans, while national and state-level proposals could ensure universal retirement plan coverage.