The Employee Benefit Research Institute (EBRI) recently released its 2013 Retirement Confidence Survey, and it looks like a lot of baby boomers are going to flunk “Retirement Planning 101.” In a nutshell, the survey concluded:

— Americans are living longer.

— Americans don’t have nearly enough saved for retirement.

— Americans are realizing they will have to work longer, and many will never retire.

First, let’s take a look at how confident workers are about whether they have enough money for retirement:

[chart 1]

What about those who have already retired? Their confidence also appears shaky…

[chart 2]

While in 2007, 41% were “Very Confident,” the number in that category has dropped to just 18%. For some additional clarity on the changes, we made a table comparing 2002 and 2013 levels of confidence and included our corresponding grades for each level:

[table]

Although it’s safe to assume those who gave themselves A’s or B’s think they will be OK, their numbers have dropped significantly.

Meanwhile, there seems to be a growing gap between public-sector and private-sector employees. The percentage of U.S. workers with defined-benefit retirement plans is down to 3% as of 2011. That means that unless you work for the government, you actually have to save (gasp!) money in order to retire comfortably. And while IRAs and 401(k)s can help, they are still voluntary programs.

So how are we doing? Not well, according to the survey.

— 57% reported having less than $25,000 in savings and investments (excluding their home equity and defined-benefit plans).

— Only 50% could come up with $2,000 in cash if an emergency arose.

— The percentage who reported saving anything for retirement is 66%, down from 75% in 2009.

Don’t let the fact that the survey excluded equity in people’s homes confuse you. The National Council on Aging published a report titled Changing Attitudes, Changing Motives, which was based on a MetLife survey of over 20,000 people who had applied to HUD for a reverse mortgage. Of the people in the under-70 group who went in for HUD counseling, 73% wanted a reverse mortgage to pay off debt, and 26% wanted to enhance their quality of life.

Having just turned 73, I am a bit ahead of the official baby boomers. When we were young, we were borrowers, and our parents’ generation did the lending… indirectly. They lent money to banks by buying CDs, and in turn the banks lent my generation money in the form of mortgages, car loans and bank credit cards. Has our generation created its own version of the movie “Groundhog Day” and remained permanently stuck in the borrowing mode?

What does this mean for us individually?

Be honest with ourselves. We’d better take a look at our personal report card and come to grips with reality. For many, that is a difficult task. But the longer we ignore the situation, the worse it gets. Being old, broke, and unable to work is not a position any of us want to find ourselves in.

Get out of debt. Debt is our enemy. We cannot save money, invest capital, and compound our returns when we are borrowing money from others.

Sell off assets. Do we really need a McMansion? We all have items we have accumulated over the years that have value. What is more valuable at this point in life: a bunch of stuff, or investment capital?

Consider working longer. If we are still in good health and don’t like our current retirement grade, we can change it. It may take some hard work, but it can be done. We can change from spenders to savers to investors if we put our minds to it.

Education is a continuous process; embrace the idea. The retirement crisis is my crisis; and if I want to enjoy my golden years, I need to address the issues honestly and directly. Whether we are accumulating capital and investing it ourselves or simply overseeing our money manager, we must stay engaged in the process. Our money can work for us, but we must monitor it for that to happen.

Each of us is responsible for our final grade. Ten years from now, those who earned the A’s and B’s will be enjoying their retirement. That doesn’t mean they were necessarily the smartest folks, but they share many traits with that group. They recognized reality and got with the program. Since we won’t get a do-over, we might as well work for that A now and enjoy the fruits of our labor.

One final thought…

Action to Take –> My overriding point is that each of us has to take control of our retirement finances, whether we’re currently retired or still have some years to go. Like I said earlier, you don’t get a chance to repeat the class on retirement planning, and no one else will do it for you. The upside here is that we can actually secure our retirement.

One way to do that is to generate more income. I don’t mean working longer hours or taking a second job, but making the money you already have work that much harder for you. Along with thousands of my Money Forever readers, we’re doing just that. Our monthly income plan is simple to put in place, and if you follow along, you’re guaranteed income every month. Click here for a short letter with all the details on this plan.