My children have a favorite story that they like me to read before bedtime. It is called “Henny Penny.”

In this story, Henny the chicken gets hit on the head by an acorn. She believes the sky is falling and that as a result she must go tell the king.

On her way to see the king, Henny meets several of her friends. Based on Henny’s experience, they too become convinced that the sky is falling and agree that they must inform the king.

You’re probably wondering what this has to do with personal finance.

Well, the American Savings Education Council, Employee Benefit Research Institute and Mathew Greenwald & Associates have issued the 14th annual Retirement Confidence Survey, which essentially says the sky is falling.

Survey’s findings

The 2004 retirement survey found that 58 percent of workers said they were currently saving for retirement. But — and this is where Henny’s declaration becomes germane — the amount of money these workers were saving was too low.

Forty-five percent of all workers report total household assets, excluding the value of their home, at less than $25,000. The survey also found 54 percent of workers expect to work to age 65 or older, and 68 percent plan to work in retirement. Good goal. However, for many that will not happen. The average retiree leaves the work force at age 62, the report found.

The sky is falling. The sky is falling.

The financial health of Medicare, which covers the medical costs for the elderly and disabled, is in distress. The Medicare program could run out of money by 2019, according to a recent report issued by the trustees who monitor Medicare and Social Security. The trustees also report that tax income in the future will cover only 73 percent of Social Security benefit costs.

Social Security alarm ringing

The coming crisis in Social Security isn’t being ignored either. Sixty percent of adults under the age of 65 are not confident Social Security will still exist when they retire, according to a study released this year by Opinion Research Corp.

In another survey released last month, consumers aged 35 to 64 were asked about their plans for saving. Fifty-four percent of those polled said they are “very worried” that Social Security benefits would be lower than promised.

And yet only 27 percent said they were very likely to increase their savings for retirement during the next few years to offset the possibility of lower benefits.

Henny Penny was wrong. Her assessment led to the demise of her friends, who foolishly believed the sky was falling.

But ASEC, EBRI and Greenwald are right to keep sounding the alarm.

Too many workers will be retiring without enough money, without the right information about their benefits, and without knowing how much money it will take to live in retirement. These not-so-spring chickens won’t be able to live comfortably in retirement.

Their sky might not fall on them literally, but it sure will be dark and cloudy.