Do you think about money a lot these days? Worried about whether you’ll have enough cash to retire on time — or ever? Afraid of what will happen to your family if an emergency strikes, since you don’t have enough of a cushion in your bank account?

You’re not alone. American savings are desperately low right now.

Much of the mayhem that has been wreaked on U.S. savings is attributed to the financial crisis. But some of the fallout is self-inflicted as 401k investors and older American workers get dangerous and sometimes desperate with their nest eggs.

Here’s some of the trouble that’s going on:

Loans of Last Resort

If you have a decent nest egg, you can take loan out of your 401k at a reasonable interest rate and with minimal penalties. But if you fail to repay that loan, it’s as good as an early withdrawal and subject to a 10% haircut.

The motivation for this kind of 401k depletion is clear: desperation. Families tap their nest egg to get through a rough patch — such as the loss of a job or an ARM adjusting up its interest rate — but never get their heads back above water in time to repay the loan.

If you think this kind of behavior was only a function of the 2008-09 downturn, think again. According to a stark report by the Brookings Institution and Navigant Economics, many Americans still are borrowing against their 401k plans, and many are failing to pay the cash back and being hit with the penalties.

Defaults are sucking out up to $37 billion annually, and researchers project the default rate between July 2011 and May 2012 was 17.4% — down from a peak of 19.8% during the depths of the financial crisis, but an ugly number all the same. Before the recession, default figures were half that at under 10% for summer 2008.

Day Trading Retirement Funds

Of course, some older Americans aren’t immediately feeling the burn. They can keep the lights on with their current situation … though admittedly, retirement seems wholly out of reach.

The result is increased risk-taking among this group as they try to make up for lost time (and money). A recent report from Aon Hewitt shows the average 60-year-old has only $114,500 in his or her 401k — which is a measly $4,580 annually if you plan on living another 25 years. But the scary part is that half have less than $37,300 in total.

The result is, in a word, panic. Older workers will try just about anything to juice returns, even if it’s risky.

In a recent Los Angeles Times article, Jeff Fischer at The Motley Fool said as many as 40% of people trading options at the site do so in retirement accounts like 401k or IRA plans.

“There is — I don’t want to use the word ‘desperation’ — but it’s close to that,” Fischer told the Times. “Ten years of a flat stock market bumps up against reality for people in their 50s or 60s who are running out of time to see appreciation.”

Smart investment decisions, of course, will grow your money faster. The risk is very real.

Lower Savings Rates

Click to Enlarge In the depths of the recession, many employers cut their 401k match plan and many employees rolled back their savings rates. After all, the need to survive was much more important than a need to plan long-term — and that goes for both businesses and workers alike.

But while things have improved across the board, roughly a quarter of companies aren’t as generous with their retirement benefits.

A November 2011 report from business consultant Towers Watson shows that 75% of the 260 companies they surveyed have restored their retirement benefits to the same level, but 23% aren’t offering as rich a package.

Many employees have been making up the difference by stowing more cash in their 401k funds in recent months as some measure of stability has returned to Wall Street and the broader economy (at least compared with the financial crisis). But it’s clear they are choosing retirement planning above any other form of savings.

39% of percent of people surveyed by the National Foundation for Credit Counseling said recently that they carry a credit-card balance over from month to month. That’s down only a tiny bit from the 44% peak in 2009.

A survey from Sun Life Financial shows that only a quarter of working Americans are “very confident” that they will have enough money for basic living expenses in retirement, down from 42% last year.

Oh yeah, and general savings have gone down the tubes. According to Bankrate.com, Almost half of Americans say they don’t have a rainy-day fund that will last them three months of expenses if tragedy strikes in the form of illness, joblessness or other harsh events. More disturbing is that one in four don’t have a penny in emergency savings at all.

What to Do?

The million-dollar question Americans have right now is what to do with their money to stay safe and hopefully provide for retirement. Well, here are a few tips — presuming you have the means to be proactive and aren’t stuck in an unfortunate situation where you simply don’t have the income to pay the bills, let alone save.

• Don’t panic: Money matters are stressful, but if you are gainfully employed and have a sustainable budget, there is no reason to flip out. The most important thing is that, unlike some less-fortunate Americans, you are financially solvent. Take comfort in this instead of freaking out about the flaws in your budget.
• Build up a rainy-day fund first: If your daily budget is sound, start building a rainy-day fund and have the discipline to leave it alone. Start shuffling a few hundred dollars a month into a savings account that is liquid and at your disposal for emergencies. Don’t spend a dime of your tax return in April, and instead plow it into savings. Give your spouse a “birthday present” of savings. It will take time — maybe a year or two — but is crucial to your financial health. Otherwise, one car breakdown or medical issue could ruin any other plans you have.
• De-leverage high-interest rate debt if you can: If you have rainy-day funds, then start taking care of your debts by prioritizing interest rates. An auto loan at 3% or less is basically just pacing inflation — so focus on that credit card balance charging 15% instead. Even an extra $20 or $50 in principle each month can dramatically whittle down balances over time.
• Put money to work, even modestly: If you have relatively low debt and an emergency fund, now it’s time to put your money to work. Contribute the full 6% allowed by tax law into your 401k, or consider opening up an IRA. If the markets scare you, then at the very least consider a CD, even a short-term one, which can offer you significantly higher interest than a retail bank’s savings account.
• Take the long view: Big financial decisions are not about picking the right number on the roulette wheel for one spin, but about a long-term commitment to your goals. Plot a clear course and revisit it regularly, but have the patience and discipline to see things through. It might seem pointless to save a mere $200 a month here and there or to contribute a mere $2,000 a year to a 401k plan. But if there were easy ways to amass the money you need and deserve, you would be golfing right now instead of surfing the Web for tips. Keep the long term in mind.