The New York Times’ journalist Eduardo Porter asks a critical question in his Economic Scene column: “How can workers and their employers be convinced, cajoled or compelled to consistently save more?”

He begins by making the case that most Americans lack the skills to make investment decisions and manage their own retirement savings. (Take an interactive quiz to test your own financial literacy.)

Of respondents to a nationally representative Health and Retirement survey of Americans age 50 and over, only one-third correctly answered all three fairly basic questions about interest rates, inflation and investments.

Along with their poor preparation to understand the intricacies of saving and investing, most American workers are also not very good savers.

From 1990 to 2010, the typical contribution to 401(k) accounts ranged from 4.7 to 5.2 percent of earnings. (Note that not every American worker has access to a 401(k) account.) Even the age group who tends to save the most – those aged 65 to 69 – typically saved 7.5 percent in 2005. If employers were to match half of their workers’ contributions, American workers at retirement still would not be “anywhere near where they must be.”

Coupled with low savings rates, early withdrawals from retirement savings accounts and large fees diminish the savings workers have available at retirement.

So Porter argues that employers, the government, or both, may need to step in to “prevent a demographic catastrophe.”

“That might require enhancing Social Security rather than limiting it,” Porter writes. “Or it might require employers to take back more of the responsibility for employee’s retirement savings.”

He concludes with an argument from Brad Delong, an economist at the University of California, Berkeley:

“The 21st century will see longer life expectancy, and thus a greater role for pensions,” Delong explains. “Yet here in the United States the privatization of pensions via 401(k)’s has been an equally great disaster.”