Study Finds Big Gaps in Savings for Retirement : Personal wealth: Disparity between richest and poorest in U.S. is stark, disparities by ethnic group even more pronounced.

A new study finds wide disparities in wealth distribution and suggests that many Americans will not be able to retain their standard of living in retirement.

Economist James P. Smith of the Santa Monica-based Rand Corp. said the biggest surprise in his study is “how little the average household has accumulated.” Many Americans, he said, “simply have engaged in very little savings.”

The top 5% of white American households with at least one spouse over 70 have wealth totaling $655,000, Smith found, while the bottom 10% of such white households have just $765 in assets.

The disparity is even more stark when race and ethnic factors are included. The top 5% of black families, also with at least one spouse over 70, have assets of $182,000; the top 5% of Latinos of the same age, $226,000. The bottom 20% of blacks and the bottom 30% of Latinos have no household wealth, he said.

Household wealth includes equity held in real estate, the value of business and other real assets and all financial assets, including savings accounts and stocks and bonds.

Most analysts contend that retirees will require large savings in addition to pensions and Social Security to maintain their standard of living in retirement.

Smith said his study suggests that the typical American household has provided sufficiently for its retirement years. He found the value of the typical household’s pension, Social Security benefits and savings represent about 69% of its pre-retirement income.

“The money consumption needs of older households fall when they retire in part because they no longer have to pay work-related expenses, all will have subsidized health care through Medicare and they can substitute their time for money and enjoy an expanding array of price discounts related to age,” the study says.

But, Smith said, two of the three legs of the retirement stool--pensions and Social Security--will play a smaller role in the future than in the past, meaning that many Americans will have to count on their savings more.

Despite the need for putting away more, however, Smith found that most middle-aged and elderly households have holdings that are very modest at best, and that large segments of the over-50 population have no real net worth.

With the declining use of pensions and the likelihood of changes in Social Security, the message for baby boomers and successive generations is unmistakable: “Loud alarm bells are ringing for the future,” he said.

Smith’s study was based on national surveys for the National Institute on Aging and released Monday at a news conference in Washington.