But sinking stocks may not be your only problem. Have you taken the time to design a well-diversified plan? Even "affluent" baby boomers--those with household incomes between $50,000 and $125,000 a year--spend less than an hour a month planning for their retirement. That's just one of several blunders identified by "Boomers on the Brink," a survey of 35-to-55-year-olds' retirement-savings strategies conducted by ING Aetna Financial Services.
Here are a few other missteps and ways to avoid them:
— Confusing your 401(k) plan with a piggy bank. For big-ticket items like a home, many boomers are dipping into the largest pot they have. But if you quit or lose your job, you have to pay back the whole loan amount quickly or you will owe taxes on the money, plus a 10% penalty if you're under age 591/2. Another trap: cashing out when you change jobs. Sure, you will start another 401(k), but you've lost momentum from compounding interest. Solution: Don't dip. You will need at least 70% of your preretirement income to retire comfortably.
— Failing to protect your main asset: you. Nearly 40% of workers surveyed in the ING report don't have disability insurance. Yet the same percentage have a good chance of being out of work for three months or more at some point. Solution: Get some disability insurance — the inflation-indexed kind is best.
— Living beyond your means. Too many of us love to buy now and pay later. Metropolitan Life estimates younger boomers have amassed personal debt equal to 95% of their income. Between paying off the mortgage and saving for the kids' education, there's little extra cash to put away for the golden years. Solution: Start paying off those credit cards now. Whittle down as much as you can afford each month--and save. If you start today by investing $150 monthly (with an 8% return), you will have about $27,625 after 10 years, according to Putnam Investments. Start three years from now, and you will have stashed away just $16,929.
The new tax bill may also help. Next year a special "catch-up" provision lets workers 50 and older contribute an extra $1,000 to their 401(k)s, increasing $1,000 each year to $5,000 by 2006. For iras, the limits are $500 in 2002 through 2005 and $1,000 after that.
So don't get blindsided by common blunders. In the long term, if you stick to your plan--and continue to re-evaluate it--you will be less likely to fall short of your goals.
For daily economic news and analysis visit time.com/business. Sharon Epperson is a correspondent at CNBC Business News. E-mail her at sharon.epperson@NBC.com