Many retirees, as well as those preparing for retirement, are overestimating their retirement assets, MainStay Investments 2005 Across Generations Retirement Income Survey found. The survey polled 1,209 middle-income and high-net-worth Americans who are of retirement age or just about to retire.

"We've known for a long time that many investors, even those with a sizeable net worth,  are seriously under-funding their retirement savings. Now we're beginning to get a better understanding as to why," said Christopher Blunt, MainStay president.

Overestimating the future worth of their homes and inheritances has led the average pre-retiree to expect that their will have nearly $1 million In savings and a net worth of $1,534,000. But their actual current savings, on average, is $660,800 and their real net worth is $904,000.

"With retirement five or fewer years away, pre-retirees face a significant retirement shortfall," Blunt said. "Today's pre-retirees seem to be basing their nest egg calculations on 'aspiration' rather than 'reality. We are seeing a pattern of denial on the part of pre-retirees about how they actually expect to miraculously create this additional wealth in just a few years' time. These individuals need sound financial advice to help provide an accurate view of the future based on their investment portfolio and other financial holdings."

Many people also don't consider another crucial factor: life expectancy. "The life expectancy of today's 65-year-old is estimated at 82 years for a man and 85 years for a woman," Blunt said. "However, we need to remember that this is a just a median; for a healthy couple in their mid-60's, there is a 50% chance that one spouse will live to at least their 92nd birthday and outlive his or her assets."

Almost 60% of current retirees and 50% of those who plan to retire within the next five years, say they are not seeking professional advice, and are planning their own retirement.

"It's imperative that pre-retirees and retirees have sound financial plans, and have them in writing," Blunt said.

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