Let's hope Social Security remains a fixture on the American scene. There are too many senior citizens dependent on it, and with $1 million seeming to be the magic retirement savings goal, a vast majority are going to fall far short of that. In fact, some experts have said that even wealthy investors will be at least partially dependent on Social Security.

But given the expectation among an overwhelming majority of Americans that Social Security will default, it could help boost mutual fund sales. Certainly, the industry doesn't need to increase fear among investors that they could be impoverished in their senior years, but the fear is certainly there.

Less than 20% of those under the age of 55 think Social Security will exist once they retire, and only 56% of those age 55 or older think it will, according to a Wall Street Journal Online/Harris Interactive poll of 2,242 adults.

Forty-five of all respondents said they don't believe either the Republicans or the Democrats will successfully address the Social Security funding crisis, but 38% said the Democrats will, and 17% held out hope that the Republicans will step up to the plate.

Despite this gloomy outlook on Social Security, few are planning to do much on their own to shore up for retirement. Only half said they plan to invest in a 401(k), and only 40% expect income from a 401(k) plan. Those with higher education appear to be better prepared for retirement, with only 4% of college graduates and 13% with some college education saying they do not have any retirement savings. Thirty percent of those with a high school diploma or less have nothing saved.

The survey also looked into investors' attitudes toward the government and employers vis-a-vis retirement. Thirty-eight percent believe the government should require employers to set aside more money for pension plans, and 49% said the government should increase tax breaks for people who save outside of work. Forty-seven percent said the government should increase Social Security payments.

The mutual fund industry needs to find the right approach. Firms overwhelm investors with frightening information about the consequences of not saving for retirement. The emphasis should be on how to help investors achieve retirement safety.

(c) 2007 Money Management Executive and SourceMedia, Inc. All Rights Reserved.

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