Retirement Savings Off 34% During Last 2 Years : Planning: Survey finds American workers will set aside an average of just $1,776 this year.

The amount of money set aside by American workers to finance their retirement has fallen by 34% during the last two years, according to a survey released Tuesday by the Employers Council on Flexible Compensation.

The study, conducted by Workplace Pulse Surveys of America on behalf of the employers council, shows that workers will save an average of just $1,776 this year toward their retirement. The figure is down sharply from $1,932 last year and $2,688 in 1992.

Despite the dramatic decline, most workers have not lowered their expectations of the quality of life they will experience during retirement, the survey shows.

Many families “just don’t realize how much money it takes to create the kind of nest egg they’re going to need,” said Ken Feltman, executive director of the council. The Washington-based association represents the interests of member employers in discussions of compensation policy.

So far, the strengthening U.S. economy has not enabled the typical worker to set aside more funds for the future, said William M. Bennett, a spokesman for Colonial Life & Accident Insurance Co., which co-sponsored the report.

“Though they need to save more, most working families--especially those younger than 45--just can’t seem to find the means to do so in spite of the reports that the economy is strengthening,” he said.

Inadequate tax incentives could be one factor in the decline, the report says. Only 14% of the 1,000 workers surveyed said existing incentives are adequate to promote personal savings.