Are you prepared for retirement? Probably not.

More than one-quarter of consumers may be overly optimistic about how well they are planning and saving for retirement, according to a Wachovia Retirement Fitness study. The comprehensive survey of 2,100 consumers nationwide revealed that 26% of consumers feel confident about retirement planning and consider themselves experienced investors, yet they may need to do more to prepare. The survey showed that many of these individuals, when compared to those who are better prepared, typically do not have a retirement savings strategy and are saving less in 401(k) plans and IRAs. (Related article: Americans still careless about retirement planning)

Some of these fears have amplified since details about personal investment accounts have been disclosed. The fact that these accounts clearly carry a high probability of lower retirement incomes has made even many young Americans lose their enthusiasm. In addition to that, the rising cost of healthcare, the job uncertainty, and rising local/state taxes has even millionaires worried about their retirement.

The Retirement Fitness study examines consumers' emotions along with their actions, or what they are doing to prepare for retirement. Four retirement fitness categories were developed from the results.

• Fitness evaluation may be useful (26% of respondents). Consumers in this group are not concerned about their retirement savings, even though they may not be as financially fit for retirement as they think. They tend to see themselves as experienced investors and prefer to do investing on their own. They admit they could be saving more and are generally optimistic about their job security and the future of Social Security and pension plans. (Related article: Most Americans not yet ready for the stock market)
• At the starting line (36%). Consumers in this group are concerned about saving for retirement and may not be doing enough to prepare. Though many are financially able to save more, nearly half say they prefer to enjoy life now rather than save for the future. They tend to consider themselves inexperienced investors and feel they will need to work during retirement. (Related article: American workers concerned about retirement incomes)
• Looking fit (11%). Consumers in this group are concerned about saving for retirement but they appear to be on the right track. More than any other group, they are likely to feel overwhelmed with too many choices of where and how to invest. They tend to consider themselves inexperienced investors but are willing to make sacrifices to save for retirement.
• Peak Performer (27%). Consumers in this group are not concerned about retirement and appear to be on the right track. They tend to consider themselves experienced investors and are willing to make sacrifices to save for the future. They are less likely to feel the need to work during retirement.

In terms of demographics, women were more likely than men to feel concerned about retirement planning and saving. Households with children were less likely to be doing as much to prepare for retirement and appeared to be more financially stretched. (Related article: Women are more likely to be hurt with privatization of Social Security)

Consumers considered in this study to be financially fit for retirement generally are willing to make sacrifices to save and invest for the future. They tend to make higher contributions to retirement plans such as 401(k) plans and IRAs, have retirement savings strategies and know how much they will need at retirement and work with professional advisors. (Related article: Personal finance tips for retirement)

How to be financially fit?

Indeed, you must try to join the "looking fit" group right away particularly with the expected privatization of Social Security that will take away guaranteed retirement benefits. Plus, a look at the proposed budget by President Bush clearly indicates that the low- and middle-income Americans are going to be hurt the most with cuts in various programs. In other words, the government is not watching out for Americans and they need to prepare for retirement on their own.

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