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Report sounds alarm bell over Americans' retirement plan

Close to half of Americans between the ages of 36 and 62 are at risk of not having enough money set aside in a retirement plan, according to a new report.

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A new report found that almost half of Americans aged 36 and 62 do not have enough in their retirement plans.

Newscom/File

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Millions of Americans are nearing retirement age without enough savings to get by – but for many there's still time to get back on track.

That's the conclusion of a study released Tuesday, which looked at the financial outlook for Americans age 36 to 62.

The report finds that nearly half of "early baby boomers," currently age 56 to 62 are at risk of not having sufficient income to pay for basic retirement expenditures and uninsured medical expenses. The "late baby boom" generation is not much better off, with 44 percent at risk. And 45 percent of Generation X (age 36 to 45) are in a similar position.

The study was conducted by the nonpartisan Employee Benefit Research Institute (EBRI) in Washington. Although the detailed study suggests a significant financial challenge lies ahead, the findings are not entirely grim.

Many workers still have time to bolster their financial position. The study estimates that for a middle-income Gen Xer, saving about 5 percent more of income could make the difference between falling short and being secure in retirement.

Moreover, the trend toward automatic enrollment in 401(k) plans, spurred by a 2006 law, has already improved the outlook for many households. This has helped in two ways: boosting participation in savings plans and boosting the performance of investments within those plans (since money invested in the stock market generally tends to yield bigger returns than other methods over the long term).

One goal of the report is to help policymakers consider what else needs to be done to improve retirement security. New policies, designed to boost private savings, could help change the outlook, too.

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