KANSAS CITY, Mo. -- Thinking about retirement? Think hard.

For many -- though certainly not all -- Americans, that may mean downsizing their home, selling one of their cars, not eating out as often and giving up planned vacations.

The latest alert about prospects for retirement comes from a new study by the Ernst & Young accounting firm undertaken for Americans for Secure Retirement, a coalition of interest groups concerned about retirement affordability.

Recent retirees are in only slightly better financial shape. About 60 percent of middle-class "new retirees" are likely to outlive their assets, the study said.

To reduce their likelihood of retirement "failure" to only 5 percent, recent retirees need to reduce their standards of living by about one-fourth.

"It's very, very scary," said Sara Rix, AARP's strategic policy adviser. "Middle-aged and older Americans tell us they're already having trouble making ends meet."

The study comes amid a wave of sobering economic indicators that forecast a leaner lifestyle for many Americans.

Wage earners overall are feeling the pinch. Real average weekly earnings have fallen by 2.4 percent over the last 12 months when inflation, as measured by growth in the consumer price index, is factored in. Overall inflation in June -- fueled largely by soaring energy prices -- posted its second-biggest monthly jump since 1982, the Department of Labor reported Wednesday. Year-over-year consumer inflation of 5 percent is at its highest level since 1991.

The Ernst & Young report reinforced a commonly accepted fact -- that Social Security provides, on average, only 40 percent of retirement income.

An example from the report that shows why savings beyond Social Security are necessary:

"While married couples with guaranteed retirement income beyond Social Security making $75,000 at retirement have a 31 percent chance of outliving their assets if they retain their pre-retirement standard of living, those with Social Security as their only guaranteed income have a 90 percent chance of outliving their assets during retirement."

The Employee Benefit Research Institute recently reported that 72 percent of American workers said they were saving for retirement. But 49 percent said their personal retirement savings, excluding the value of their homes and any defined benefit plans, amounted to less than $50,000. About a quarter of workers and retirees said they had no savings of any kind.

"Unless workers aged 55 to 59 increase their saving substantially or work beyond age 65, they will be unable to maintain their current standard of living and will have to reduce their standard of living significantly more than today's retirees to minimize the risk of exhausting their financial assets," the Ernst & Young study concluded.

More workers 45 and older are reporting in AARP surveys that they intend to work beyond traditional retirement age. But, AARP's Rix noted, illness, disability and other factors beyond individuals' control often prevent that from happening.

Still, she said, the percentage of workers 65-69 has mushroomed in recent years, primarily because of economic concerns.

The labor force participation rate for that age group in 1985 was 18.4 percent. In 2007 it was 29.7 percent -- a more than 50 percent increase.

"The Ernst & Young findings are troubling," Rix said. "We know that about half of the work force has private pensions. But those are giving way to defined contribution savings plans. And we know what the market recently has done to those. I know I'm nervous when I open my quarterly statements."