Nearly three-quarters of those who plan to work into their 80's say they fear their employer won't want them working when they're that old.
Nearly one-third, or 30%, now plan to work until they are 80 or older -- up from 25% a year ago, according to a Wells Fargo survey of 1,000 adults with income less than $100,000.
"It is so tough for Americans to save for retirement that the answer seems to be to work longer," said Joe Ready, director of Wells Fargo Institutional Retirement and Trust.
Overall, 70% of respondents plan to work during retirement, many of whom plan to do so because they simply won't be able to afford to retire full time.
But working well into your 70's, 80's or even 90's, isn't always realistic, said Ready. Nearly three-quarters of those who plan to work into their 80's say their employer won't want them working when they're that old, for example. Other roadblocks, like health issues, could arise as well.
Those who are unable to work as long as they intend could therefore face a very grim reality. In fact, more than one-third of Americans could wind up living at or near poverty in retirement, the survey found.
About 34% of middle-class Americans expect their retirement income to be 50% or less of their current annual income. Given Census Bureau data showing a median household income of $50,054 in 2011, this would mean living on roughly $25,000 or less per year -- which is near the poverty line for a family of four, the report found.
Retirement saving on the backburner: Half of middle-class Americans report that their most pressing financial concern is paying their monthly bills, up from 37% a year ago. Saving for retirement is second on the list.
Respondents also said that home remodeling and vacation planning have taken precedence over saving for retirement over the past 12 months.
As a result, there's a huge disparity between what people need and what they have saved. While respondents said they will need a median of $300,000 in total savings to support themselves in retirement, the average amount saved is only $25,000.
Overall, 53% of Americans say they don't know whether they will have enough saved for retirement -- up from 42% last year.
Despite falling short of expectations, half of respondents said they consider themselves responsible for funding their own retirement through saving and investing. Another 27% said they will fund their retirement through their employer's plan, while 24% said they will mainly rely on Social Security benefits.
Aside from putting daily bills and current financial needs ahead of retirement saving, many Americans aren't in the position to adequately fund their own retirement because they have no idea how much to save. Only 22% say they have calculated the amount of money needed for retirement -- whereas 75% of respondents said they guess. (Find out how much you will need for retirement).
And guessing can be dangerous. While respondents estimated that the median cost of their out-of-pocket healthcare in retirement will be $47,000, for example, industry estimates put those costs closer to $260,000 or more, according to the report.
"People tell us that retirement preparation should be on their shoulders but they are grappling with financial pressures each day," said Laurie Nordquist, director of Wells Fargo Institutional Retirement and Trust. "As a result, retirement has become a guessing game."
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