Are your retirement goals divorced from reality?

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(MoneyWatch) Earlier this year, I wrote about a survey that revealed that many Americans have views about retirement that are disconnected from reality -- what I called "." The 2012 Retirement Confidence Survey, recently released by the Employee Benefit Research Institute (EBRI), provides even more evidence that many Americans have wishful thinking about retirement planning. Let's take a look.

Will you really be able to work in your retirement years?

Almost one-quarter, or 22 percent, of workers in the EBRI survey report that during the past year, they increased the age at which they plan to retire. More than one-third (37 percent) say they're planning to work beyond age 65. And 70 percent of workers plan to work for pay during their retirement years.

Yet these expectations aren't consistent with the experience of actual retirees. The EBRI survey reports that just 18 percent of retirees said they retired after age 65, and the median, or midpoint, actual retirement age reported by current retirees has remained constant at age 62 for the past several years of the EBRI survey. Half of current retirees say they left the workforce unexpectedly due to health problems, disability, or changes at their employer, such as downsizing or closure. Only 27 percent of current retirees report that they worked for pay during retirement.

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The bottom line: Don't count on work you do during your retirement years to bail you out from not saving enough for a comfortable retirement.

Will you really get a pension?

More than half of all workers (56 percent) expect that they or their spouse will receive a retirement income from a traditional defined benefit pension plan. However, just one-third of workers report that they or their spouse currently have such a benefit with a current or previous employer.

Employers have abandoned these traditional pension plans like the plague, so it's extremely unlikely that you'll earn a pension if you aren't already one of the lucky few people who work at a company that still sponsors one.

The bottom line: Realistically assess your employer's retirement programs. Don't count on something that you don't have already. You most likely won't get it.

What do you expect from Social Security?

Sixty-nine percent of retirees report that Social Security provides a major source of their retirement income. Yet most workers are expecting reductions in Social Security benefits. Only six percent of current workers expect the same level of Social Security benefits delivered to current retirees, while 21 percent of workers don't expect to receive anything from Social Security.

This last result is just too pessimistic. Social Security is one of the most popular government programs and I believe we'll have Social Security as long as we have democracy. Given the current financing issues, however, it's inevitable that we'll see some reductions in future Social Security benefits, particularly for workers under age 55.

You'd think that if workers anticipated receiving reduced Social Security benefits, they'd save more for retirement to make up for the benefits they're expecting to lose. Yet the EBRI survey shows that the percentage of workers currently saving for retirement has declined recently. Indeed, only two-thirds of workers report that they're currently setting aside funds for retirement.

The bottom line: If you really think you'll be getting less from Social Security, you need a backup plan. The good news is that if you're over age 55, you'll most likely receive the current level of benefits.

Failing to plan is planning to fail

Just 42 percent of workers report that they've tried to calculate how much money they need to retire, while an equal percentage say that they've guessed at the amount they need to save. And the amounts that workers report as needed for a comfortable retirement are way too low.

The bottom line: Guessing how much to save for retirement isn't going to work. There are many retirement planning materials easily accessible and available for free, including several good online retirement calculators. There's a strong chance that you can access a calculator through your 401(k) plan at work. You can also work with an experienced financial planner who can help you decide exactly how much to save for the retirement you want.

Replace your wishful thinking with solid action steps, and you'll prevent your "golden" retirement years from rusting out.

  • Steve Vernon On Twitter»

    For more than 35 years, consulting actuary Steve Vernon helped large employers design and manage their retirement programs. Now he's a Research Scholar for the Stanford Center on Longevity, where he helps collect, direct, and disseminate research that will improve the financial security of seniors. He also delivers retirement planning workshops and has authored Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck and Recession-Proof Your Retirement Years.

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