Only one in three Americans now believe they will be able to fully retire as huge losses in home and stock prices dent their confidence in the future, according to a study by Scottrade.
Just 32 percent of Americans thought they could someday stop working altogether, down from 39 percent from the 2008 survey. That represents an 18 percent decrease in just the last year, and a 22 percent decline from the 2007 survey.
Americans anticipate having to work longer, as their nest eggs have been shrinking and the economy has made it harder to save, said Chris Moloney, chief marketing officer at Scottrade.
The U.S. economy is suffering its worst recession in at least a quarter century as a crisis that first flared in the housing sector spreads to other areas. Homes nationwide have lost over a quarter of their value, and stock prices fell this week to their lowest levels in more than 10 years.
Against this backdrop, it was not surprising that 43 percent of respondents said their retirement savings had decreased 10 percent or more in the last year. Two-thirds said they do not plan to contribute to an IRA account this year, up from just over half last year.
Those closest to retirement were most vulnerable.
Baby boomers have been hit the hardest by the current downturn and have the least time to recover, Moloney said. As a result, nearly 75 percent of boomers fear full retirement will not be an option for them.
Many reported taking actions to cut back spending in the face of worsening economic conditions. Sixty-one percent said they were reducing spending less on things like movies and restaurants, while 36 percent said they were delaying major purchases such as cars.
The survey was based on representative sample of 1,000 Americans 18 years of age or older.