Correction Appended

The "ownership society" envisioned by President Bush from creating private Social Security accounts is nothing new for the many millions of Americans already investing for their retirement through 401(k) plans and the like.

One thing stands out from that quarter-century of experience: those with relatively large surpluses to invest - mostly those at the top of the earnings ladder - have managed to amass enough wealth to serve them well in retirement. But farther down the income scale, a number of workers have been unable to handle money intended for their old age as successfully. 

"If you look at the whole generation it is doing a very good job managing its retirement savings," said Craig Copeland, a senior research associate at the Employee Benefit Research Institute, a nonprofit policy research organization. "But a significant portion are not doing a good job and some have done a horrendous job."

According to new research by Mr. Copeland, more than half of all Americans born from 1931 to 1941 - the generation that retired over the last decade or so - increased their wealth by more than 50 percent from 1992 to 2002. 

While most workers did well, roughly 15 percent, mainly in the lower reaches of the income scale, depleted more than half their total wealth over that decade. 
Elinor Sheridan of Westlake, Ohio, who retired in 1998 from a job as a risk manager at a hospital, reflects that experience. Ms. Sheridan, who will say only that she is in her 70's, started saving for retirement later in life, after a long stint as a stay-at-home mother. She was never able to invest much after a divorce and the death of her former husband. 

In 17 years at the hospital, she managed to put together a modest personal account, worth some $60,000 when she retired. But now "it's gone," she laments. "I made the last withdrawal last summer."

Ms. Sheridan, who lost over a quarter of her savings when the stock market plunged in 2000, says she can survive on a combination of Social Security and a small pension from the hospital, which adds up to less than $20,000 a year. But she's now looking for a job and would like to earn $400 to $500 a month. 
About half the American work force is covered by some sort of company pension. Until a quarter of a century ago, it was usually a defined-benefit plan, which provided specific monthly payments based on a formula reflecting an employee's earnings history and years of service. 

But in the 1980's, under the spur of federal legislation authorizing tax-advantaged 401(k) accounts, American companies began to shift from defined-benefit plans to so-called defined-contribution plans. They encouraged the change through a combination of carrots (by providing matching funds to supplement individual contributions) and sticks (withdrawing traditional pensions or substantially cutting back on their benefits). 

Between 1980 and 1999, the fraction of covered workers who had a traditional defined-benefit plan dropped by half, to 40 percent from 80 percent, according to the Center for Retirement Research at Boston College. And the percentage of workers with a 401(k) or similar retirement savings plan jumped, to 85 percent from 40 percent.

Many workers have come out well ahead, enjoying the substantial benefits from their initial tax deductions and the advantage of deferring taxes on gains until withdrawal while riding the stock market booms of the 1980's and 90's to build up substantial nest eggs. 

"I feel pretty comfortable," said Chuck Desiato, 61, who retired four years ago from a 32-year career at the Gates Corporation, a hose and belt manufacturer in Denver. In his working life, he spent 15 years earning a traditional pension and 17 years building up about $300,000 worth of savings in a 401(k) account. 
Mr. Desiato estimates he needs about $3,000 a month on top of his $1,200 pension to maintain the standard of living he and his wife are used to. Combined with Social Security, he figures that a 7 percent to 8 percent return on his investments will provide enough income for him and his wife without ever having to touch his principal.

"I think I did a good job of planning," Mr. Desiato said.

Edward Wolff, an economist at New York University, found that the average pension wealth of workers aged 47 to 64 - the value of their defined-contribution plans and what remained of their defined-benefit pensions - soared 67 percent between 1983 and 2001, to $170,800 after accounting for inflation.

But that overall gain was tilted by the outsize profits of mostly affluent employees like Mr. Desiato. According to Mr. Wolff's analysis, the median pension wealth of employees between the ages of 47 and 64 - a point more representative of the typical retirement nest egg, where half of workers have more and half have less - increased by only 18 percent over the period. That amounts to a gain of less than 1 percent a year, to $50,000. 

This growth, moreover, was accompanied by a reduction in other savings. The median wealth of workers, including pensions and other sources, declined 2.2 percent in the 18 years covered by the study. And this was through one of the strongest stock markets in history. 

"The 401(k) is a lot more unequal than the defined-benefit system," Mr. Wolff said. "The continuing transformation of the pension system will exacerbate the trend."

For many Americans, the ownership society already involves a host of complex decisions. Employees must decide whether to participate in a savings program, how much to contribute, how to invest their portfolio and whether to cash out when changing jobs. 

"In defined-benefit plans the investment risk is pooled across all workers," said Annika Sunden, an economist at Stockholm University in Sweden who is associated with Boston College's retirement center. "With 401(k)'s, individuals themselves bear the financial risk, and have the responsibility for a whole range of decisions on saving."

Ms. Sunden and Alicia Munnell, director of the Boston College retirement studies center, estimated that a worker making the minimum ideal contribution of 6 percent of wages to a 401(k) plan, with a company match of a further 3 percent, could do better than with a traditional pension.

If the account achieved a 4.6 percent annual return on top of inflation, the assumption adopted by President Bush based on historical returns, a worker retiring at 62 after 30 years of savings and a final salary of $52,650 would amass more than $350,000. This could provide annuity income for the rest of the person's life of roughly $31,000 a year, higher than the $26,500 such a worker would get from a typical defined-contribution pension.

But not many middle-income Americans - juggling buying a home, paying for college for their children, handling catastrophic medical expenses and other such unexpected costs - manage to consistently save that much. "Ten to 12 percent of their salaries?" said Ms. Sheridan, the retiree in Ohio. "Ha, ha."

In 2001, the most recent year for which comprehensive figures are available, the Federal Reserve's survey of consumer finances found that the median savings in a 55-to-64-year-old American's 401(k) or individual retirement account added up to $42,000, less than one-eighth the amount needed at 62 to achieve the retirement income estimated by Ms. Munnell and Ms. Sunden.
Retirement account balances have increased since then, in line with the stock market's gains. Yet according to a survey by the Employee Benefit Research Institute, by the end of 2003 the 401(k) balances of people in their 60's were still 9 percent lower than at their peak in 1999, before stocks took a dive. 
Fewer than 10 percent of eligible workers contribute the maximum amount to their 401(k), and about a quarter contribute nothing at all. Many younger workers empty their 401(k) accounts when they change jobs - postponing saving for retirement.

Low savings are not the only problem. After they retire, workers must manage their savings, a task often complicated by unexpected expenses.

When Robert Stacy took an early retirement package from U S West more than six years ago, at 53, he had a traditional pension. But he took only half as an annuity, worth $900 a month, and the other half as a lump sum. His total savings at the time, including his 401(k) and the proceeds from the sale of his house, added up to almost $600,000.

The Stacys expected this money would be enough to roam through the country carefree in their new R.V. But six years later, the stash is down to $400,000. And the couple is facing higher health expenses since Qwest, which took over U S West in 2000, started charging hefty premiums on its retirees' health plans. So the Stacys, too, decided to take up jobs in retirement. "If I had to choose again," Mr. Stacy said, "I would have taken it all as an annuity."