Many people — not just the baby boomers — relied too heavily on home equity and certain investments to bank a return without actually considering what would happen if the world economy sank like a stone.

Most did not save nearly enough cash. They relied too heavily on U.S. property appreciation and were lulled into the belief that the good life would always last.

As a result of the global economic downturn, however, the use of retirement funds targeted for care-free leisure years had to be reworked by both individuals and professionals. Some nest eggs were lost altogether.

The baby boomer generation never met a loan it didn’t like. That cohort is now paying the fiddler. This generation, born between 1946-64, effectively changed everything it touched, starting with cars, jeans, ice cream, houses, home loans and health care.

The oldest of the generation will be age 65 this year and the youngest of the generation will be hitting their 60th birthdays in the year 2024.

According to the sixth annual Retirement Fitness Survey, conducted by Harris Interactive Inc. for Wells Fargo, nearly three out of every four working, middle-class Americans (72 percent) between 25-69 expect to work through their retirement years.

The main reason for this response was a deep deficit in personal retirement savings. Survey respondents answered that they have saved less than 7 percent of their desired retirement goal.

The results mirror other surveys taken in the past few years. Several research companies report that only 25 percent of all 79 million baby boomers are financially prepared to retire in the lifestyle they expected.

"Too many Americans have their heads in the sand in the face of obvious savings deficits," said Laurie Nordquist, director of Wells Fargo Institutional Retirement and Trust.

"People are not even close to where they need to be in total savings. Barring a miracle, a winning lottery ticket or a big inheritance, they’re going to be forced to dramatically cut back their lifestyles after retirement."

Harris Interactive Inc. conducted 1,756 telephone interviews of middle-class Americans for the Wells Fargo project, surveying attitudes and behaviors about saving and investing for retirement.

The survey included only respondents who fell within the following income and wealth brackets: those 25-29 with household income of $25,000 to $99,999 or investable assets of $25,000 to $99,999; those 30-69 with household income of $40,000 to $99,999 or investable assets of $25,000 to $99,999.

The lower income limit for 20-somethings was used to reflect the early stage of their careers. Interviews were conducted between Sept. 9, 2010, and Oct. 7, 2010.

The Wells Fargo survey results accurately reflect Nordquist’s view that many Americans don’t have a clue about the financial requirements for retirement. The report found that the median retirement savings for those 50-59 was only $29,000 for an expected 20 years of retirement.

Ironically, 56 percent of respondents said they were "confident or very confident" that they would be able to financially support their lifestyle through retirement.

"People in their 50s and 60s are the last generations that can depend on traditional pensions, and their confidence level as they approach retirement reflects that," said Joe Ready, director of Wells Fargo Institutional Retirement and Trust.

"In the younger age groups, we’re seeing that individual savings efforts, whether through 401(k)s or IRAs, are much more important than to older generations — most likely reflecting the reality that they know they are responsible for their own retirement."

For all the age groups surveyed, $300,000 was the median amount predicted to be needed for a proper retirement nest egg. However, the median savings of these respondents was only $20,000. They also expected to spend 10 percent of their retirement nest egg annually. Standard industry recommendations call for annual withdraws in the 4 percent range.

That’s a huge gap to bridge. How could there possibly be enough time to save $280,000 when only $20,000 has been stashed so far?

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