'Dream Retirement' Proves Elusive, Study Says

(Dow Jones) The deep recession has more investors concerned about meeting their basic needs in retirement, and many plan to postpone retiring despite the stock market rebound, according to a survey.

Enjoying one's golden years appears elusive for more investors, Hartford Financial Services Group Inc.'s 2009 investment and retirement survey found.

Hartford surveyed 750 U.S. residents 45 years or older, who are U.S. residents and are responsible for making financial decisions for their households. The online survey was conducted in September and has a margin of error of plus or minus 3.5%.

This year, 65.2% of respondents indicated that meeting daily expenses for food, shelter and other basic needs was their main retirement concern, up from 49.7% in 1008 and just 24.5% in 2007.

"There's a shift going on from thinking about hopes and dreams and my ideal retirement to saying, 'Let's put that on hold. My life is OK now. Would I be able to live this way in retirement with the plans I've put in place?'" said John Diehl, a certified financial planner and senior vice president with Hartford's Investment and Retirement Products Division. "It's back to basics, which I think is healthy."

Only 14.4% indicated in the latest survey that enjoyment was among their financial priorities in retirement, down from 26.2% last year and 43.2% in 2007.

Diehl characterized that as a likely overreaction "caused by fear generated by uncertainty."

While 49.1% of respondents indicated they're still on target to retire as planned, 31.6% of respondents indicated they have no idea when they'll be able to retire and 19.3% indicated they'll have to postpone their retirement for up to two years or more.

Fewer respondents indicated they consider themselves risk-averse. Those describing themselves as "completely averse" to risk dropped to 13% from 15.4% in 2008 and 15.7% in 2007. Those who would accept "some risk" for a "moderate potential for financial gain" increased to 51.7% from 46.8% in 2008.

The results may reflect the fact that investors feel they have to take some action to make up for what they've lost, which can be "a dangerous approach," Diehl said.

Some 14% of respondents indicated the affordability of health care or long-term care for themselves or their spouse was their No. 1 financial care, down from 15.9% in 2008. Those numbers may be less a reflection of declining health-care concerns than of investors' increasing worries about meeting daily expenses in retirement, Diehl said.

Meanwhile, those who had a retirement plan in place were more confidant than those who didn't. Nearly one-third of those who had a plan were "very" or "extremely" confident that they'll have sufficient income in retirement, compared to 10% of those who had not planned, the survey found. Also, 57.7% of those with plans in place said they were on target to retire as planned, compared with 38.7% of those who didn't, according to the survey.

"The things that we fear the most are the things we feel most uneducated about," said Diehl. "One of the most important roles a financial adviser can play is the role of education, helping people understand what happened in the last market cycle or how such cycles eventually resolve themselves."

Even the survey itself reflects the new reality. For three years, Hartford conducted the survey internationally, but this year it canvassed only U.S. consumers.