Is there a retirement savings crisis or not?

Retirement income isn't adequate in 49 of 50 states, according to a recent survey, adding to a rash of conflicting information about how financially ready (or not) Americans are for their retirement years. So are we in the midst of a retirement crisis? Or is all the hand-wringing overblown? 

If you follow these things with even passing interest, a headline or a survey bemoaning Americans’ lack of retirement preparedness seems to lurk around every corner. Here’s another.

The latest cause for alarm: Retirees in 49 of 50 states aren’t bringing in adequate income, according to a recent study from Interest.com. “Many financial experts say retirees need at least 70 percent of the income they earned in their working years, but only seniors in Washington, D.C., and Nevada are meeting that threshold,” the study reads. “Massachusetts’ seniors face the largest income gap for the second year in a row; they bring in just under half as much money as Massachusetts residents between 45 and 64 years old.”

“Many Americans are struggling to make ends meet in their golden years,” Interest.com managing editor Mike Sante said in the study’s release statement. “Especially in high-cost areas such as the Northeast, retirees are not only competing against the higher incomes of their younger counterparts, but they are also battling higher costs for housing, gas, food and other necessities.”

The study drew on data from the Census Bureau’s most recent “American Community Survey,” dividing the median income of households aged 65 and older by the income of households under age 65. Seniors in 28 states were able to replace at least 60 percent of their pre-retirement income; in addition to Nevada and Washington, D.C., seniors in Hawaii, Arizona, and Mississippi came close to meeting recommended levels. Massachusetts and North Dakota fared the worst, and the high coast of living meant seniors in the Northeast fared generally poorly.

Washington retirees fared so well because of the large number of retirees with generous public pensions, an option that is rapidly disappearing for most of the country’s workers in favor of contribution-based plans that shift the responsibility of saving and investing onto the worker. “We’re really concerned about folks in their 30s, 40s, and 50s getting to be that age,” Mr. Sante says in a phone interview. “Today’s seniors aren’t making that 70 percent even though they have a couple of things going for them, like generous corporate and government pensions. “You could get $50,000 or $60,000 a year without thinking about it when you were working, and that isn’t possible now. You have to do the work of saving.”

The study is the latest in a rash of conflicting information about how financially ready (or not) Americans are for their retirement years. In August, a study from Bankrate (Interest.com’s parent firm), found that one-third of Americans aren’t putting away recommended amounts.

But there’s some recent evidence that habits are improving. A study released over the summer from Transamerica’s Center for Retirement Studies found that retirement savings have either doubled or tripled across all age groups since 2007, a jump credited to a booming stock market and heightened awareness of the need to save.

So, are we saving enough? Or is there a retirement crisis? Like most things, the answer lies somewhere in the middle. The financial industry, for one, may have a tendency to overstate the issue, says Ben Harris, deputy director of the Brookings Institution’s Retirement Security Project, based in Washington. Financial planners “are paid by commissions that [traffic] in liquid wealth, so it’s in their best interest to recommend saving a lot of money."

The demographic savings gaps, too, are often measures of inequality more than anything else. “If someone is poor for their life, it’s unrealistic to expect them to be rich in retirement,” he adds. “The poor have many problems, but retirement security tends to not be one of them because of Social Security and Medicare.”

Still, Americans counting on long-term retirement security face some serious obstacles. One is the cost of medical care: The Employee Benefit Research Institute (EBRI) estimates that a married couple without employee-subsidized health care would need to save around $400,000 to cover their medical expenses in retirement. Another, Mr. Harris says, is “people just don’t know how long they’re going to live, especially women. People can outlive their assets."

To combat the latter issue, especially as life expectancies rise, the US Treasury introduced new regulations this year making it easier for people to buy longevity annuities, which provide protection in case of outliving one’s assets. But encouraging people to save more and finding the right products for those who have saved enough remain challenging.  “Right now we have a very weak long-term savings market,” Harris says.

But there’s no reason to panic, for the most part. “Most people, if they can get between $300,000 and $500,000 saved up, that will provide the boost they need to have a very fine retirement,” Sante says. “But that first $100,000 is the hardest, so getting started is [key].”