BOSTON (TheStreet) -- New research underscores just how ill-prepared many Americans are for retirement.
Nyhart, an actuarial and employee benefits consulting firm, released the findings of a six-month study this week that evaluated how workers' contributions to their 401(k)s, the primary retirement tool for most employees, would affect the age at which they could retire.
Researchers reviewed nearly 10,000 retirement accounts from employees at 110 public and private companies to determine that 81% of employees 18 or older will not be able to afford to retire by the age of 65. The study blames it on "their failure to contribute enough of their income towards retirement."
The study also considers the impact of the Great Recession of 2008-10 on those 55 and older who expected to retire at age 65. That group, Nyhart says, will need to contribute more than 45% of pay through the remainder of their career to retire by age 65; ages 45 to 55 must contribute 19% to reach the same target.
The average participant, relying on a 401(k) as the primary retirement vehicle, will not be able to retire until the age of 73, the report says. Most employees 60 to 64 will likely need to work until 75 to be able to afford to retire at their current levels of contribution to their 401(k).
"The decision of how much an employee contributes to their 401(k) far exceeds the importance of which investment funds they choose," Thomas Totten, senior actuary and lead researcher for the study, said in a statement. "By increasing your contribution by just 2-4% of total income, you can shave years off the age you retire."