When it comes to their retirement, America's 50-somethings seem to be in a state of denial. Although the economic downturn has forced pre-retirees ages 50 to 59 to consider working years longer than they had hoped, their current rate of savings is unlikely to fund the retirement lifestyles they expect, according to the fifth annual Retirement Fitness Survey from Wells Fargo & Co. released late last year.

Only 23 percent of pre-retiree respondents said they were saving more for retirement than they were a year earlier, the survey found. Most—57 percent—were saving the same amount, and 20 percent were saving less. Sixty-seven percent said their expectations for retirement had changed in the past year, and 56 percent now expected to work longer by an average of three years.

Overall, researchers said, the financial positions and savings habits of this group were insufficient to last for their expected 20-plus years of retirement. While pre-retirees surveyed expected to need $800,000 for retirement, they had saved only $300,000, figured on a median basis.

Pre-retirees clearly hadn't assessed how long their savings would last in retirement. They expected to live nearly 21 years in retirement, but planned on spending nearly 10 percent of their savings every year in retirement. The industry recommendation is to withdraw no more than 4 percent annually.

People have been overly optimistic about their investment returns, researchers said. When they started saving (typically in their 30s), both pre-retirees and retirees expected the value of their investments to grow by 8.7 percent each year, on average. In fact, the compound annual growth rate of the S&P 500 from 1958 through 2008 was 6.6 percent.

Despite their inadequate savings, nearly two-thirds lacked any formal plans for retirement savings or spending strategies. Only 35 percent of the pre-retirees had a written plan for retirement, and of this group, only 52 percent said they had updated it in the past year during the market downturn.

Less than half—40 percent—wished they had been more proactive about educating themselves about retirement preparation. Only 34 percent wished they had cut back more on their previous lifestyle and saved more for retirement.

"In the wake of the severe economic crisis, we had expected to find people had become more conservative in their savings and spending behavior," says Lynne Ford, head of Wells Fargo Retail Retirement. "We were surprised to see how few people have increased their rate of savings and how many people in their 50s have no retirement plan at all. For people in the last 10 to 15 years of their working career, the failure to have a thorough retirement plan in place is like driving while blindfolded."

On behalf of Wells Fargo, Richard Day Research conducted 2,108 online surveys with pre-retirees (ages 50 to 59) and young retirees (ages 55 to 70). Those interviewed were relatively affluent, each having at least $100,000 in household investable assets, excluding real estate. The margin of error in the survey was plus or minus 3 percent.

Other top findings of the nationwide survey included the following:

*Women respondents were more likely than men to feel affected by the economic downturn, were less certain about their retirement and investing, and regretted that they weren't better prepared. Pre-retired women who participated in the survey said they now expected to retire later than they did a year ago (62 percent, versus 50 percent of men), and 41 percent said they now think they'll need to work in retirement "just to make ends meet" (versus 32 percent of men). Women expected they would have to cut back on their retirement lifestyle (60 percent) more than men (52 percent).

Men were much more confident than women about their ability to maintain their lifestyle in retirement. Among male retirees, 47 percent said they were "very confident they will have enough money to sustain them throughout retirement at an acceptable level," versus only 30 percent of female retirees.

Seventy-six percent of pre-retirees said the economic downturn has changed their current lifestyles in ways that include less travel, job loss, or reduced income. Travel is the biggest single cutback after the economic crisis, with 46 percent of pre-retirees and 42 percent of retirees saying they have eliminated or cut back on travel.

Many of the respondents were very concerned about their finances, with some sounding grim or even traumatized. One respondent reported feeling "very insecure about the market and if the money will hold up," adding, "I don't feel like I will ever feel like there is enough." Another said, "I expect to have insufficient funds to maintain my lifestyle if I live beyond 75 years." And one pre-retiree said, "A significant portion of my 401(k) evaporated last year. I expect to have to work longer to rebuild the amount I had accumulated prior to last year."

Compared with men, women were angrier about the economic crisis and more uncertain about their retirement and investing plans.

Pre-retired women had saved less toward retirement and were less likely than men to know how much they would need to save before retiring, judging by the study. On average, the pre-retiree women surveyed had saved $250,000 toward retirement, versus $300,000 for men, and were likelier to be saving less toward retirement compared with one year ago, at 24 percent of women versus 16 percent of men.

Thirty-seven percent of pre-retired women respondents said they couldn't even estimate how much they'd need before retiring, versus just 17 percent of men. Also, pre-retired women were more likely than men to expect they'll have to cut back on their retirement lifestyle (60 percent vs. 52 percent).

Among retirees, women were more likely to be "angry" (29 percent) about the current crisis and its impact than men (21 percent), and more retired women than men said they wish they had started to save earlier in life (46 percent of women vs. 38 percent of men).

Among pre-retirees, 45 percent of women wished they had educated themselves sooner about retirement (versus 36 percent of men), and 37 percent wished they had cut back on their lifestyle to save more (versus 30 percent of men).

Additionally, women were less likely (27 percent) to be contributing the maximum to their 401(k) plans than men (41 percent).