The numbers are dismal. But worse still is our reaction -- actually, our lack of action.

I'm talking about the latest reading of the "National Retirement Risk Index" calculated by the Center for Retirement Research at Boston College. Battered by a lengthy recession, a record 51 percent of American households are now considered at risk of not having enough money to sustain their standard of living in retirement.

That's the case even if they work until age 65 -- two years beyond the current average retirement age -- and take a reverse mortgage on their home and use all their assets, including the mortgage proceeds, to buy an inflation-adjusted lifetime annuity to maximize their income.

In 2004, 43 percent of households were considered at risk, based on the Center's analysis of a triennial Federal Reserve survey of consumer finances. In 2007, the number rose to 44 percent, the Center estimates now based on that year's Fed survey. Without waiting for the next survey in 2010, Center researchers decided to update the index in response to the recent recession and economic crisis.

The index needed updating because the 2007 survey "reflects a world that no longer exists," the Center's report says, with the Dow Jones Industrial Average near 14,000 and housing prices only slightly off their peak.

Admittedly, the new 51 percent figure is based not on actual Fed survey results but on the Center's projections of what they would have been in the second quarter of 2009. Since then, financial conditions have improved. The index also does not factor in possible income from work in retirement.

Still, while stocks are bouncing back, home prices are unlikely to shoot up quickly again. With people living longer, the Social Security full retirement age increasing gradually to 67 and low interest rates keeping annuity payouts low, the analysis "clearly indicates that this nation needs more retirement savings," the Center's report says.

"We are clearly facing a retirement crisis -- one that will continue to grow as younger workers age," said Alicia Munnell, director of the Center. "To overcome today's retirement challenges, people need help understanding financial topics so they can make reasonable financial choices throughout their lives."

Unfortunately, many Americans are reacting to the economic downturn not by resolving to save more but by no longer actively planning for retirement. A survey by Nationwide Insurance.

Also, the percentage of Americans participating in employment-based retirement plan decreased from 41.5 percent to 40.4 percent in 2008, according to the not-for-profit Employment Benefit Research Institute.

A separate study by benefits consultant Hewitt Associates found that an "alarmingly high" 46 percent of workers with a 401(k) plan who quit their jobs in 2008 took a cash distribution rather than keep their tax-deferred savings by rolling the money over to an individual retirement account or leaving it with their old employer. Cash distributions from 401(k) plans when leaving a job are subject to ordinary income tax plus a 10 percent penalty if under age 55.

"Employees don't seem to be getting the message" about the negative impact of prematurely cashing out of retirement plans, said Pamela Hess, Hewitt director of retirement research. The danger is that millions of Americans who rely on 401(k)-type plans "will find themselves unable to achieve a financially secure retirement," Hess said.

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© Humberto Cruz