NEW YORK -- Either Americans are kidding themselves or they know something about their lives that the financial experts don't.
The experts say, over and over, that the boomer generation isn't saving nearly enough for its retirement. Yet two-thirds of working Americans 26 and up say they're pretty confident that they'll achieve security in old age, according to a poll by the Employee Benefit Research Institute (EBRI) and Mathew Greenwald & Associates in Washington, D.C.
Around 20 percent think they're saving more than enough, Greenwald says. Another 45 percent think they're on track to accumulating just enough.
An amazing 80 percent believe that their retirement standard of living will be the same or better than it was when they worked; 84 percent are confident that they'll be able to cover all their basic expenses; 70 percent say they will be able to afford to live wherever they want.
The question is, why do they feel so good when conventional wisdom says that they ought to be feeling bad? Or, to put it another way, why does conventional wisdom appear to be wrong?
One reason seems to be that workers started saving money earlier than their parents' generation did, and will retire with more cash in hand. That's doubtlessly thanks to the rise of Individual Retirement Accounts and 401(k) plans. Even 25-year-olds have been joining retirement plans.
Many surveys of boomers' assets leave out the value of their retirement-savings plans, including the value of traditional lifetime pensions. So their financial well-being is often underestimated.
In another financially savvy move, large numbers of homeowning boomers pay something extra toward their mortgage each month. By the time they retire, they expect to own their homes free and clear.
Paid-up homes cut your annual cost of living. If you sell, they're a future source of cash. With a reverse mortgage, you can take a monthly income out of your home equity, without having to move. Reverse mortgages have been a slow-growing phenomenon, but will probably be widely available to retired boomers. So mortgage payments are another significant source of savings.
There's inheritance, of course, for the lucky ones.
There's a changing definition of retirement. Many boomers expect to work part time during their early retirement years.
There's a heightened awareness of old-age needs. One-third of the workers polled in the EBRI study said they had tried to figure out how much money they will need to retire on. That was rare among their parents' generation, which trusted more to luck. Many financial organizations now publish financial planners, to help you forecast retirement needs. When you use tools like these, you become more inclined to save.
There's a better understanding about what Social Security offers. "Many people used to think that it covered your whole retirement income," says EBRI President Dallas Salisbury. "Now they know it's a floor and that they have to save more themselves." Social Security will be there when you retire, although probably paying less to high-income retirees.
Finally, confidence springs from the evidence right before your eyes, Greenwald says. Boomers see a retired generation that is generally doing well and expect that they will do the same. People tend to have modest goals in retirement: to volunteer, to spend time with their grandchildren, perhaps to travel a bit more. So they're not foreseeing an expensive way of life.
Another recent study, this one from EBRI and the Public Agenda Foundation, found a similar split between the experts and the public. America's "opinion leaders" -- business people, labor leaders, politicians, columnists, educators -- tend to think that tomorrow's retirees won't do as well as retirees today. But among the workers polled, six in 10 think they'll be able to maintain their current standard of living. "The leadership elite thinks that people will never get it," Salisbury says. "The public is far more confident about their ability to think things through and do what needs to be done."
Those who think they'll fall short tend to be people with below-average earnings. Yet Social Security replaces a high percentage of the income of lower-income workers. So this group, too, has a reasonable shot at maintaining its current standard of living.
In short, most boomers are doing OK. If you keep on saving as you have in the past, adding more money as your income and age goes up, you can ignore all that expert wringing of hands. Your retirement will work.
You can write to Jane Bryant Quinn at: Newsweek, 444 Madison Ave., 18th floor, New York, N.Y. 10022.