The long series of financial setbacks that millions of people have suffered through for more than a decade now has taken its toll on investor confidence. Now, those setbacks are starting to show up in the decisions that workers are making about when to retire -- and for many, the news is worse than ever before.

But unless you think you'll like what you do for an extra 15 years beyond when many people hang it up and retire, you can take steps now to avoid the fate of many less fortunate workers. I'll give you more details on exactly how to do that later in the article, but first, let's take a look at just how dire the situation is for many people right now.

I'll sleep when I'm dead
A recent retirement survey from Wells Fargo looked at what 1,500 middle-class Americans expect from their golden years. Ranging in age from 20 to 80, survey respondents represented a broad cross-section of the overall population. Among the disturbing results of the survey were the following:

  • Although the typical worker had a fairly reasonable retirement savings goal of about $350,000, half of all respondents had saved $25,000 or less toward their retirement. Put another way, the typical person fell 93% short of meeting their financial goals. Even if you only look at people in their 60s, the situation didn't get much better: 30% still had less than $25,000 saved up.
  • As a result, fully three-quarters of those surveyed expect to work throughout their retirement. A quarter believe that they'll need to put off retiring until age 80 in order to feel comfortable that their savings will be enough to get them through their golden years.
  • Uncertainty about Social Security, pensions, and Medicare are also contributing to concerns among workers about the viability of retiring at a reasonable age. A quarter of those in their 20s or 30s expect to get nothing at all from Social Security.

Before you conclude that there's no hope, it's important to point out that many people actually expect to want to work in retirement. But there's a huge difference between working because you want to and working because you have to -- and it can have a big impact on how much you enjoy what you do.

Take back your retirement
But whether you're just starting your career or pondering whether to add another 15 years to your working life before you retire, there are some things you can do to stack the deck more in your favor. Getting rid of high-interest debt will let you avoid getting dragged back down into a downward money spiral. Cutting expenses and doing what you can to save more will also go a long way toward helping your long-term prospects.

But what many people don't focus on is getting the most from their savings. Money in a savings account earning 0.1% isn't going to help you reach your retirement goals. You need investments like these:

  • Young investors have been reluctant to take risks in their retirement portfolios, despite having long time horizons to ride out market volatility. But both established stocks like tech giant Intel (Nasdaq: INTC) and cropseed-producer Monsanto (NYSE: MON), as well as up-and-coming innovator 3-D Systems (NYSE: DDD), may well have growth potential into the next century.
  • Dividend stocks aren't a substitute for bonds, but they do serve a valuable role for most investors. Sticking with low-volatility stocks with good yields, including Altria (NYSE: MO), Kimberly-Clark (NYSE: KMB), and General Mills (NYSE: GIS), should help you avoid some of the bumpiness in the overall market. A dividend ETF like Vanguard High Dividend Yield ETF (AMEX: VYM) can also do the trick.
  • To take away some of the risk of the stock market, consider buying an immediate annuity with part of your accumulated retirement savings. The regular income it provides will supplement Social Security or other pension payments.

Of course, this strategy doesn't guarantee that you'll have the retirement of your dreams. But smarter investments will help you take your savings as far as it can go.

The path to quitting
Working until 80 will make some people perfectly happy. But don't leave yourself in a position where you have no choice in the matter. It's not easy to save more, but investing better is something we can all strive for.

Get some more tips for making the most of your finances in our newest free special report, where we reveal "The Shocking Can't-Miss Truth About Your Retirement."

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.