"The economic turmoil of the past few years has taken a major toll on the retirement dreams of those age 60 and older, especially those in their 60s," said E. Thomas Foster Jr., vice president and national spokesperson for The Hartford's Retirement Plans Group. "The financial services industry - financial advisors in particular - need to reach out to their mature clients to help them get back on track."
According to The Hartford's study, many of today's pre-retirees say they have "no idea" as to when they can retire (28.3 percent for ages 60-69 and 33.3 percent for age 70 and older) and a significant percentage (36 percent) of those ages 60-69 believe they will have to postpone retirement for up to two years or more.
With nearly nine in 10 people in their 60s expressing concerns about having enough money in retirement, more than half (55.4 percent) plan to work longer and put off retirement or work part time during retirement. Nearly half of those age 70 and older (44.4 percent) said the same. A significant percentage (17.4 percent for ages 60-69; 33.3 percent for age 70 and older) of survey respondents say they never plan to retire.
Many people within this demographic say the market and economic dislocation has prompted them to reduce their standard of living or reduce expenses (63.1 percent for ages 60-69 and 66.6 percent for ages 70 and older). Three in four people in their 60s (75 percent) say their No. 1 financial priority in retirement is simply keeping up with daily expenses.
Older Americans have differing views on their greatest risk in retirement. Those in their 60s worry most about a significant health event or problem (33.7 percent), with outliving their money (26.1 percent) coming in second. Meanwhile, people age 70 and older say their biggest concern is outliving their money, followed by losing their buying power to inflation (22.3 percent) and losing money in the financial markets (22.1 percent).
Foster said investment and financial tools are available to help older Americans repair their retirement savings and potentially reclaim their retirement dreams:
* Many people who have access to a defined contribution retirement savings plan such as a 401(k) can save as much as $16,500 in 2010. Most people do not come close to saving the maximum. At the very least, contribute enough to realize the full match from your employer, if available.
* If you are age 50 or older, you may be able to save another $5,500 a year, every year, for as long as you are working and enrolled in your employer's plan.
* Contribute to tax-deferred retirement savings vehicles such as 401(k)s, Roth IRAs or annuities, if appropriate, to maximize the growth potential of your savings. Savings compound faster if you defer taxes on your earnings.
* Many Americans can contribute up to $5,000 a year to regular or Roth IRAs, another way to accumulate retirement savings. A regular IRA allows you to deduct your retirement savings on your federal income taxes, while a Roth IRA allows you to take your retirement savings tax-free.
* Modestly compensated employees can qualify for a special federal Saver's Credit based on contributions to a defined contribution retirement plan or an IRA. The credit is designed to encourage retirement savings. The tax credit can equal as much as 50 percent of their total contribution, capped at a total credit of $1,000, depending upon the level of contribution and the employee's income. The credit is available on a sliding scale to those who are age 18 or older; do not attend school full time; are not claimed as a dependent on another federal tax return; and whose adjusted gross income does not exceed $27,750 for single filers and for those who are married filing separately. The income limit is $55,000 if married filing jointly, and $41,625 if head of a household with a qualifying person.
* Business owners can contribute as much as $49,000 annually to a 401(k), with the appropriate plan design. Although most people cannot afford to contribute this much to a retirement plan, there are many owners of successful businesses, medical or legal practices that can and do. The additional $5,500 contribution is also available to those age 50 and older.
* Successful, established businesses can set up a cash balance defined benefit plan. A cash balance plan can complement an existing 401(k) plan, enabling participants to accumulate additional assets for retirement. With the right plan design, owners of the business can put aside significant assets in a cash balance plan.
"It's not easy, but for those who have the will and the wherewithal, there are tools available to help consumers play 'catch up' with their retirement savings," Foster said. "The Hartford urges everyone to meet regularly with a financial advisor and a tax professional to review their progress toward their retirement and other financial goals, and make adjustments accordingly."