Tom Murphy
RedwoodAge.com

When you think about retirement, do you imagine a golf course and travel? Or do you see a stack of unpaid bills?

The No. 1 financial concern for people over 45 is now paying for food, shelter and other basic needs, according to a global survey by the Hartford Financial Services Group. Last year, the top concern in the US,  UK and Germany was "enjoying my life."

The radical shift in tone stems from the turbulent financial and realty markets, which have eaten about a third of the average retirement nest egg over the past year. Boomers have watched the value of their homes plummet along with meager savings in their 401(k)s. And the minority that is expecting a pension have plenty to worry about, too.

The actuarial firm Milliman said it's Index of 100 leading pension funds suffered its biggest-ever loss in October - $59 billion, representing a 12 percent drop in pension funding from the beginning of the year. Assuming no return for the rest of the year, pension funds are on track to close out the year with a deficit of $93 billion, resulting in a $154 billion charge to corporate balance sheets at the end of fiscal 2008.

"We've been issuing this index for eight years and have never seen a monthly asset loss so large," said John Ehrhardt, co-author of the Milliman 100 Pension Funding Index. "These are volatile times for pensions, and they will likely result in a $40 billion reduction in corporate earnings in 2009."

Half of Americans over 45 are worried about getting by on a daily basis in retirement, according to The Hartford's data. The numbers are even higher overseas, even though many European countries have guaranteed pensions. In the UK, the number is 59 percent; in Germany, 56 percent; and in Spain, 54 percent. 

Bad to Worse
The survey, which also included Italy, Japan, South Korea, Taiwan and Australia, was conducted during the summer when financial markets were volatile, but before the collapse of several major US banks in the ongoing credit crisis.  Since then, there have been daily headlines about threats to major industries and institutions that boomers once considered rock solid.

"As millions of baby boomers around the world close in on retirement, they are realizing that they are financially unprepared to start this new chapter in their lives," said Peter Smyth, executive vice president of The Hartford's International Markets. 

"Our research tells us that few people are planning for retirement, most lack confidence in their financial acumen, and many don't know where to turn to for advice," he said. "The volatility in the world's equity markets this year seems to have reinforced the overall uncertainty about financial planning."

Among other findings in the survey:

• 43 percent of the Americans said they're concerned they won't have enough money to enjoy life;
• 16 percent of Americans said they may not be able to afford health care;
• 27 percent said they're worried about running out of money before they die;
• 79 percent of Americans held a low opinion of their abilities in financial planning, and 27 percent said they don't know where to turn to get help; and
• 45 percent said they'd done no retirement planning.

"The overall level of financial preparedness globally remains low and is deteriorating," Smyth said.