This, from the Getting Going column of the June 27, 2007 Wall Street Journal:

Take households headed by someone 55 to 64 years old, which is America’s wealthiest age group. Even for these folks, who are on the cusp of retirement, the median household net worth—including home equity—is under $250,000 according to the Federal Reserve’s 2004 Survey of Consumer Finances.

Two points: First, this is notable since home equity is traditionally excluded from net worth calculations. Second, OMG.

The gist of the article is that $1 million ain’t what it used to be. True: “Thanks to 20 years of inflation, $1 million today has just 54% of the purchasing power of $1 million in 1987.” Given what we know about the solvency of Social Security (not to mention the looming healthcare disaster of Medicare), one can only assume that upper-middle aged Americans today are planning to work until they drop—which is fine if the world continues to need their particular skill set.

Only the richest 2% of Americans qualify as millionaires. Assuming that $1 million is an adequate retirement sum—the article argues that it may not be sufficient to generate the income one would want without drawing down principle—we’re still left with 98% of Americans with inadequate retirement funds.

Caveats abound, of course. What is “sufficient” for one person maybe “insufficient” to the next. The longer life expectancy coupled with vastly improved equality of life measures may well mean that people continue to work past traditional retirement age (again, assuming the marketplace needs their skills). A fix may be found to Social Security.

But make no mistake, a confluence of factors have left Americans less financially secure retirements and the financial burden is now shouldered by the workers themselves whether they want it or not.

By the time Erin and I are members of the 55 to 64 age group surveyed above, we plan to have a net worth well over $1 million excluding home equity. Given America’s coming fiscal train wreck, I would suggest you do as well.