The typical American household has less than $20,000 socked away for retirement and plans to supplement the remaining 59% of their savings with Social Security, according to a new report from Fidelity Investments.

The fund behemoth yesterday launched its Fidelity Retirement Index, which officials with the Boston-based firm call "a first-of-its-kind analytic index" and bases its findings on a survey of about 1,900 American households. Going forward, Fidelity plans to report on the index's findings twice annually. The firm concurrently announced plans to broaden its Retirement Income Advantage program.

The index's initial findings reflect that the typical working American household, where the primary decision maker averages age 43, has accumulated a scant $18,750 for retirement.

By itself, the Fidelity research suggests, retirement savings will currently comprise 10% to 20% of the average household's income replacement. In addition, Fidelity officials said its index shows that 15% of typical American households are on track to supplant 85% or more of pre-retirement income, "which is a reasonable estimate for retirement planning."

The index also found that younger working American households, or those with primary decision makers aged 25 to 40 years, are typically on track to replace about 55% of projected pre-retirement income when they retire. That compares to 63% of households whose primary decision makers are aged 41 to 54 and 62% of households whose principle decision makers are aged 55 or older.

Pay Cut on the Horizon

"While this data may seem encouraging, American are relying heavily on Social Security and employer pensions and are only saving a small percentage of their personal income to fund their retirements," said Jeffrey R. Carney, president of Fidelity Personal Investments, in a statement. "What this means, in effect, is that many Americans will take a significant pay cut in their retirement years, making it difficult for them to adequately prepare financially for rising retiree medical costs and longer anticipated life spans."

To broaden its Retirement Income Advantage product, Fidelity plans to add new content and an enhanced planning tool at its Web sites, and

The effort is part of a previously announced expansion of the firm's income planning initiative aimed at the first wave of the more 76 million Baby Boomers entering retirement over the next decade.

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