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The 401k generation is beginning to retire, and it isn't a pretty sight.

The retirement savings plans that many baby boomers thought would see them through old age are falling short in many cases.

The median household headed by a person aged 60 to 62 with a 401k account has less than one-quarter of what it would need in that account to maintain its standard of living in retirement, according to data compiled by the Federal Reserve and analyzed by the Center for Retirement Research (CRR) at Boston College for The Wall Street Journal. Even counting Social Security and any pensions or other savings, most 401k participants appear to have insufficient savings.

Data from other sources also show big gaps between savings and what people need, and the financial crisis has made things worse.

This analysis uses estimates of 401k balances from the end of 2010 and of salaries from 2009. It assumes people need 85% of their working income after they retire in order to maintain their standard of living, a common yardstick.

Facing shortfalls, many people are postponing retirement, moving to cheaper housing, buying less expensive food, cutting back on travel, taking bigger risks with their investments and making other sacrifices they never imagined.

"Inevitably, we find that, for the average person, there is not enough there," says financial adviser Paul Merritt of NTrust Wealth Management in Virginia Beach, Va., who has found himself advising many retirement-age people with too little savings. "The discussion turns out to be: What kind of part-time work do you want to do after you retire?"

He has clients contemplating part-time work into their 70s, he says.

Tax-deferred 401k retirement accounts came into wide use in the 1980s, making baby boomers trying to retire now among the first to rely heavily on them.

The problems are widespread, especially among middle-income earners.

About 60% of households nearing retirement age have 401k-type accounts, according to government data, and those represent the majority of most people's savings.

The situation is less dire for those in a higher income bracket, who tend to save more outside their 401k accounts and who have more wiggle room if their retirement returns fall below the recommended 85% replacement level.

Steven Rutschmann, 60, manages the buildings and grounds at a research facility in the Midwest. His employer recently offered him a bonus if he retired early.

Rutschmann's 401k is well into six figures. His wife also has a 401k and expects a small pension from her nursing job. An outdoorsman, Rutschmann dreams of spending time hunting, fishing and hiking.

So he consulted a financial planner at Ernst & Young and learned that even with the bonus, his savings could run out before he turns 85. Now he expects to work for several more years.

"I was disappointed," says Rutschmann, whose 401k balance was damaged by the financial crisis and who still has a large mortgage.

In general, people facing problems today got too little advice, or bad advice. They didn't realize that a 6% annual contribution, with a 3% company match, might not be enough.