Will you outlive your nest egg?

A new study says that you probably will. And that data was collected before the stock market went on its recent roller coaster ride.

Almost three out of five new middle-class retirees will outlive their financial assets if they keep up their pre-retirement lifestyle, according to an Ernst & Young study conducted on behalf of Americans for Secure Retirement.

The study also found that middle-income Americans entering retirement now will have to reduce their standard of living by an average of 24 percent to minimize the likelihood of outliving their financial assets.

And the news doesn't get better. If you plan to retire in seven years, says the study, you're likely to be even less prepared and will have to reduce your standard of living by even more, an average of 37 percent.

Tapping retirement money in tough times: Another study makes the Americans for Secure Retirement predictions even more distressing. It shows we're using what little retirement money we have saved well before we quit working.

Robbing Tomorrow to Pay for Today, a study issued today by the Center for American Progress, found that workers in 2004 had $31 billion in outstanding 401(k) loans, a fivefold increase from $6 billion borrowed from workplace retirement plans in 1989.

Look for those numbers to go up in this current economic crisis. As the economy slows, people are losing their jobs, and wage gains are falling behind sharply higher prices for energy, health care, transportation and food.

To help make ends meet, say report authors Christian E. Weller of the University of Massachusetts Boston and Jeffrey B. Wenger of the University of Georgia, families are turning to their retirement accounts.

Expect that trend to continue, say Weller and Wenger, as other borrowing venues, particularly home equity lines, have closed down because of lower house prices, tighter credit standards, and slower income growth.

Staking out retirement friendly states: The nest-egg study also assessed retirement vulnerability by state. It noted that how likely you are to outlive your retirement accounts varies depending on where you live.

The variations across the 50 states are due to differences in employer pension plan coverage, income distributions and demographics.

Retirees who attempt to maintain their current pre-retirement standard of living are more likely to have saved enough to do that if they live in Washington, D.C., since a high percentage of residents of the nation's capital are covered by a government pension plan. Rhode Island, Utah and New York retirees also see their retirement funds last longer.

However, 72 percent of Montana's residents who don't scale back in retirement are likely to outlive their post-career assets.

Looking for retirement tax havens: A few years ago, I wrote a story on retirement tax havens. The key here is to look beyond the income tax issues that occupy our tax consciousness during our working years.

Other taxes that come more into play in retirement are property taxes, including homestead exemptions and added breaks for older homeowners; state taxation of Social Security and other pension benefits; sales taxes assessed on items already being purchased on a fixed income; investment income taxation; and, ultimately, estate and inheritance taxes that your heirs will have to deal with.

The Retirement Living Information Center has compiled data on the various state taxes as they are likely to affect your Golden Years.

Retiree image courtesy of Fortune Watch.