While the number of Americans who claim to be preparing financially for retirement has remained relatively steady during the past 12 months, employees in many of the nation's largest metropolitan areas report feeling significantly less confident than they did a year ago, according to a retirement readiness index released today by Ameriprise Financial. In its second year, they examine the 30 largest U.S. metropolitan areas to determine where consumers are the most prepared for and confident about retirement, and also track national and local retirement trends over time.

The top three spots on this year's index were all claimed by California metros: San Francisco, Sacramento and San Diego. Indianapolis ranked last, with New York City and Atlanta rounding out the bottom three. Metropolitan areas were scored based on responses to a national survey that measured consumers' likelihood to have determined the amount of money they need to save for retirement and their actual saving habits. The index also takes into account if people have planned for a variety of activities during retirement and expressed confidence about achieving their retirement goals.

While 75% of Americans say they've taken steps to prepare financially for retirement, the economic uncertainly that has persisted over the past year appears to be taking a toll on people's emotions. A mere 18% of consumers surveyed across the United States say they believe they'll achieve their dreams in retirement, down significantly from 21% who shared this sentiment in 2010. Likewise, when asked how they feel about this stage of life, more Americans express negative feelings than did so last year, including the number who say they feel worried (24% vs. 21%), anxious (21% vs. 17%) and depressed (10% vs. 8%) when they think about retirement.

"A bit of pessimism is understandable considering that the financial markets have been highly volatile, unemployment remains high and many have seen the value of their homes continue to decline," says Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial. "While all these issues can make focusing on retirement difficult, they also underscore the need for careful planning that doesn't just take in account the things you can control, but also factors in the impact of those you can't."

Lack of confidence plagues the bottom three

While people in Indianapolis, New York City and Atlanta could definitely be doing more to prepare for retirement, locals' negative outlook on retirement is the primary reason these metros appear at the bottom of the index.

Just over a quarter (27%) of Indy residents report they feel "hopeful" about retirement, compared to a third (33%) of those surveyed nationwide. Likewise, a mere 13% say they believe they will be able to achieve their dreams in retirement — and some of those dreams may also be taking a backseat to more pressing needs. For example, the number of people in Indianapolis who say they are planning to continue their education during retirement dropped to a mere 5%, down from 11% in 2010.

Significantly fewer New York City (30%) and Atlanta (31%) residents say they feel on track for retirement than do other Americans across the country. (37%). Low numbers of New Yorkers also report feeling very confident about their financial future (17%) or in their ability to reach their retirement goals (20%).

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