New York ? Like millions of Americans, Betty O’Reilley has found that life’s ups and downs can make it hard to save for retirement.

O’Reilley had two children in college when her husband died of a heart attack in 1987. She went back to work and tried to put aside money for both tuition and retirement. But at 60, she’s grappling with higher-than-expected college costs for her third child, and the stock market’s downturn has taken a big bite out of her retirement portfolio.

“Five years ago I would have said, ‘Yes, I can retire at 65,”‘ said O’Reilley, of suburban Philadelphia. “Now I see myself retiring at about 70. I have to make up for those losses.”

A complacency problem

Whether Americans can provide for their own retirement is a critical issue today. The majority of workers, including O’Reilley, don’t qualify for traditional pensions, and there are concerns about the viability of the Social Security system. In addition, many people hurt in the bear market are afraid to get back into stocks, which are among the few investments that can outpace inflation.

So can Americans possibly save enough?

“Yes they can,” said J. Michael Scarborough, chief executive of the Scarborough Group Inc. retirement advisory firm in Annapolis, Md. “But will they? I don’t think so.”

Scarborough blames the problem, in part, on complacency. After all, most people saw their parents and grandparents manage OK in retirement, so they assume things will work out for them, too.

“They forget that their grandfather lived on a farm that was paid for and had a garden and killed a couple of chickens a week,” he said. “And their parents retired before companies started killing pensions and cutting health benefits.”

The new reality for young workers is that “somehow, some way, 15 percent of your income has to go into retirement savings,” he said. “Then money won’t be an issue.”

Patti Brennan, a certified financial planner in West Chester, Pa., who advises O’Reilley, said one of the biggest challenges is that people are living longer so they have more retirement years to fund.

“In the mid-1980s, we used to run a financial plan out to age 85,” Brennan said. “At this point, we run it at least out to 95.”

A pending shock

That makes calculating retirement needs even more intimidating. Brennan gave the example of a husband and wife who expect to receive about $1,500 a month from Social Security and want their savings to provide an additional $2,500 a month in retirement.

If they were to retire tomorrow, they would need at least $600,000 in capital to allow them to withdraw 5 percent, or $30,000 a year, and not outlive their money. Most couples have accumulated nowhere near that amount.

A study late last year by the Congressional Research Service found the average value of workers’ company-sponsored retirement accounts was about $46,000 in 2000. For households, the average value was $71,040.

Among workers ages 55 to 64, the average value of the accounts was about $72,000, and $107,040 for the entire household.

“It’s going to be a shock for a lot of people because they won’t be able to finance the kind of retirement they want,” said financial planner Barry Glassman of McLean, Va., who serves as president of the Washington, D.C., area chapter of the Financial Planning Association.

Americans nearing retirement not only need to step up their savings significantly, they also have to overcome the fears instilled by the 1999-2001 market decline and get back into stocks and other investments with better rates of return, Glassman said.

“People are willing to take less risk today,” he said. “Five years ago, people were shooting for the moon. Now, they’re so risk-averse they won’t benefit from the market recovery.”

And he believed many will have “to find ways to shake the money tree during retirement.”

That, Glassman said, means working past the traditional retirement age of 65, either full- or part-time.

Robert W. Dineen, chief executive of Lincoln Financial Advisors in Philadelphia, said that as painful as the three-year bear market was for many Americans, it had the positive effect of killing the “bubble mentality” of the 1990s and refocusing Americans on saving.

Young people, he said, are more aware that if they start putting money away early — and take advantage of compounding over 20 or 25 years — “they can reasonably expect to accomplish their retirement goals.”

Older workers are more willing to seek professional advice, Dineen added.

“They’re willing to recalibrate savings levels and asset allocations to get from where they are to where they want to be,” he said.

That doesn’t necessarily make it easier.

Michael Etter, 47, a dentist in Medford, N.J., worries about saving enough to pay for college for his four children, ages 2 to 8, and for his own retirement.

“The last few years didn’t help at all,” he said. “I feel very bad for people I know who thought they were retiring and can’t, who will have to work two to five years longer.”

He has a financial plan, which he reviews twice a year, and a simple bottom line: “I have a long-term horizon. … I just have to put away as much money as I can.”