Survey: 40% of Americans fear they won't be able to retire

Forty percent of Americans now say the economic crisis means they won't be able to retire, according to a new survey by Simplywise. And one in five respondents plan to dip into their 401(k) to make ends meet.

"I think fear is starting to take over and anxiety is setting in.  So people are potentially making irrational decisions when it comes to their finances," said Allie Fleder with Simplywise, a website that helps consumers determine their retirement benefits.

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The Simplywise survey of 1070 Americans over age 18 revealed half of the respondents fear their quality of life will suffer in retirement. 67% say they'll keep working in retirement. While one in five respondents say will take money out of their 401(k) now.

"It is alarming and what we constantly recommend to our users is if at all possible, they should leave their retirement savings alone," said Fleder.

The C.A.R.E.S. Act raises the total amount you can take out of a 401k or other retirement account and cuts the 10% penalty.

"Prior, you could borrow up to 50% up to 50,000, now you can borrow up to 100% up to 100,000," said Ed Gardner, a Certified Public Accountant.

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But Gardner warns that can hurt your retirement dreams.

"This is money for down the road. They're not allowing the money to grow. And you know where normally you hear buy low, sell high, you're doing the reverse now, you're selling low," said Gardner.

The Simplywise survey also revealed 33% of respondents in their 50's and 60's say they plan to claim Social Security benefits early. But Gardner breaks down the math.

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"So where you might get $1000, and you took it out at 62, that's three years early. You're going to get $320 less," he calculated.

Instead, both Gardner and Fleder suggest looking at other options.

"You might re-evaluate your budget and see how we spend because we have what are called 'wants' and what are called 'needs,'" said Gardner.

"It's better to look into affordable loan options, whether that means tapping into your home equity or just taking out a personal loan," said Fleder.

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