Despite everything, Susan Buer, a 46-year-old South Dakota homemaker, is confident that she'll have enough money to retire on. She's in the process of getting divorced, a situation that affects nearly half of all married couples, and one that usually leaves both partners worse off financially. She has less than $10,000 in savings. Credit card debt and a car loan cloud her future. She hasn't yet calculated how much she'll need to retire, although she's "very confident" she can do the math. "Eventually, I'll talk to a financial planner about all this, but I just haven't had the time yet," Buer says.

In her approach to retirement, Buer reflects the best and worst of many Americans—a can-do spirit and procrastination. According to a recent AARP Bulletin poll, many people are confident that they can meet their basic retirement expenses, yet have not done basic planning or calculated what funds they'll need. Many fear their employers will cut back on their health and pension benefits but have not begun to save adequately for the costs they'll face.

The poll, which surveyed 1,096 workers and 686 retirees age 40 and older, indicates that many Americans may not have adjusted to the new economic reality: that the responsibility for funding retirement is shifting from business and the federal government onto the shoulders of workers themselves.

This is happening gradually, as traditional "defined benefit" pensions, which are based on salary, are being replaced by more chancy "defined contribution" plans, such as a 401(k), that require employees to contribute a percentage of pay and bear much of the risk of investing the principal. In 1980, 83 percent of workers with pension plans were enrolled in a defined benefit plan. Today, that figure has shrunk to 21 percent, according to the U.S. Department of Labor.

Workers may not yet fully grasp their own increasing role in retirement planning or the implications of what Yale professor Jacob Hacker calls "the great risk shift." Although 68 percent of workers (or their spouses) said they've saved some money for retirement, 31 percent have not saved a dime. The most common reasons were "not enough income" and "high everyday expenses." Thirty percent also said that a lack of financial discipline was a contributing factor.

Just last month, the Center for Retirement Research at Boston College released a study that painted an equally gloomy picture of retirement, saying that 45 percent of working-age households are "at risk" of being unable to maintain their preretirement standard of living.

"Unless Americans change their ways, many will struggle in retirement," said CRR Director Alicia H. Munnell. "There is no silver bullet; the answer is saving more and working longer. Even relatively modest adjustments—working two extra years or saving 3 percent more—can substantially improve retirement security."

Rose-colored glasses seem to be particularly characteristic of the 75 percent of all workers who define themselves as "very confident" or "somewhat confident" about having enough money to live comfortably in their retirement years. Of that group, 48 percent haven't tried to calculate their retirement savings needs; 22 percent have saved no money so far for retirement; and 43 percent have less than $25,000 in savings and investments, excluding the value of their homes and defined benefit plans. Most worrisome, a third of them have no money in a 401(k), and 45 percent have no IRA savings.

However, when it comes to specifics like pensions, health care and debt, respondents express serious concerns. Among the findings:

• Pensions. Forty percent of those who are employed—or whose spouses are employed—worry that their employers will reduce or eliminate pension or health care benefits before or during their retirement. In fact, some reported that such changes had already occurred in the last five years: elimination of a traditional defined benefit pension plan (10 percent) or the plan's benefits frozen or reduced (9 percent); traditional pension plan converted into a 401(k)-type defined contribution plan (15 percent); and health care benefits reduced (44 percent).
• Social Security may help fill in the gaps. Thirty-nine percent of workers say they expect Social Security to be a major source of their retirement income — this compares with 58 percent of current retirees who report that Social Security is a major source of their income.
• Health care. Twenty-eight percent of workers and 13 percent of retirees said they were concerned about not having enough money in retirement to pay for their medical expenses. And 40 percent of workers and 33 percent of retirees are worried about their ability to meet long-term care expenses.
• Debt. Debt is a serious issue for both workers and retirees. More than half of workers see their (or their spouse's) current level of debt as a problem, compared with 30 percent of retirees. Workers are also more likely than retirees to carry a mortgage, credit card debt or a car loan, or even medical or dental debt.

So how much does it take to retire? There is no single answer. One rule of thumb is that workers should plan on replacing 60 to 70 percent of pretax employment income with savings and investments. Some may need less if all debts, mortgages and other loans are paid off and health care is covered.

And if there's a financial shortfall, continued employment may be a last resort. Two in 10 workers in the Bulletin poll say they plan to draw a major portion of their retirement income from a job. The back-to-work crew may just be the most realistic of all.

Paul Magnusson is a freelance writer in Washington.

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