Like many Americans, Mike Ferrari says his retirement plans aren t what they used to be.

Since the stock market crashed in September 2008, Ferrari, 49, is not only investing more conservatively than he used to, he is spending more time monitoring his investments. He is also putting off retiring for another three to six years to build up a larger starting nest egg.

Why? Things are just too risky these days, Ferrari says. The term playing the market didn't used to mean that you were literally gambling. Now, with all of the derivatives -- and derivatives of derivatives -- one can be 100% on target about fundamentals, but still lose money because folks on the other side of the trade have not just hedged, but taken huge positions using derivatives.

Ferrari, who co-owns the Integrity Group, a security consultancy in Pleasanton, Calif., says those positions have forced him to change his own. Normally, at this point in my life, I d be 90% invested in the stock market; I d have bonds and real estate, as well, he says. Today, I m just not feeling comfortable.

He s not alone. Just 13% of workers surveyed in January of 2009 were very confident about having enough money to retire comfortably, down from 16% in 2008 and 27% in 2007, according to the Employee Benefit Research Institute's latest Retirement Confidence Survey. Another 44% of workers were split evenly between being not too confident and not at all confident about having enough for retirement. Current retirees were also feeling insecure about their savings. Only 20% of retirees expressed full confidence in having enough funds to last them through retirement, down from 29% in 2008 and 41% in 2007, according to the EBRI survey.

Ferrari hasn t always been skittish about the markets. In fact, he used to have his investments -- along with his retirement plans planned out to the year. Initially, Ferrari would quit working at 55 and live off his investments -- mutual funds (biotech companies, mostly), cash and about 20 individual stocks through, which are now parks in a Roth IRA, a tax-advantaged individual retirement account.

Then, financial services giant Lehman Brothers collapsed. After watching interviews and listening to conference calls, I could sense real fear in the air from people who shouldn t have fear, Ferrari says. As a result, he began to take a deeper look at his own finances. I went into work mode, he says.

That s when Ferrari discovered five questionable companies in his portfolio that he eventually sold off. Among them: Maui Land & Pineapple (MLP) was notified by the New York Stock Exchange in January that it fell out of compliance with the NYSE s listing standards. The company s average market capitalization amounted to less than $50 million over a 30-day trading period -- and it recently reported that shareholders equity totaled less than $50 million. As it turns out, Lehman Brothers Holdings was the company s lead lender of its syndicated construction loan when it filed for bankruptcy protection.

In addition, Ferrari reduced his exposure to about 15 other blue-chip stocks. I was around for the crash of 87 and remember it well, he says. At this point, it didn t matter how blue it was. If I had $20,000 in a position, I reduced it to $10,000. In total, Ferrari managed to plow another $400,000 into cash and by bailing out of those five risky investments when he did, Ferrari estimates having saved roughly $60,000.

Later, Ferrari reinvested much of his funds into other blue-chip companies -- he waited until their values plummeted, of course. It was safer to diversify into two or three of the best companies in an industry rather than reduce his cost basis in one existing investment, he says. Ferrari also increased his use of specialized exchange-traded funds, or ETFs, which are funds that track an index but trade trade like a stock.

Although Ferrari s savings have crept back up -- thanks to a well-received rally on Wall Street -- his business did suffer some setbacks. From the second half of 2008 through early 2009, the company saw a 30% sales drop, while investors were trying to figure out just how low the market would go. Since then, however, business has picked up, as incidences of fraud often increase during downturns, he says. Sales have increased slightly above pre-crisis levels, Ferrari says.

Despite the business being on more stable footing, Ferrari says he isn t convinced that his business or investors at large are out of the woods. Here we are well over a year after this huge once-in-a-one-hundred-year event and we still don t know what the rules are, he says. What is my tax rate going to be for me and my business? Will card check legislation go through? Will cap and trade regulations affect utilities prices? he asks. Because of this uncertainty, Ferrari has decided to push off closing up shop. At the start of retirement, I want to have full peace of mind, he says.

Q&A

Of course, saving for retirement is an individual process. But there are certain questions most middle-aged business owners should be asking themselves. Here are four we asked wealth management professionals.

What is the first step for owners trying to build up retirement savings at age 49?

Business owner or not, old or young, people planning for retirement need to find out what kind of expenses they ll need to cover when they quit working. To discover what yours will be, work up a budget of where your money is going now. From that initial budget you ll be able to extrapolate what your expenses will be going forward, says Carlo Panaccione, the co-founder of the Navigation Group, a wealth advisory firm in Redwood Shores, Calif. He suggests considering potential expenses such as helping pay for a child s wedding, as well as other income, such as Social Security payments.

Anything specific for business owners?

Plenty. First, a lot of business owners plow their profits back into their business. While that s fine, it might leave someone in financial ruin -- and even penniless during retirement -- if they get hurt or if a business partner passes away. To avoid that fate, look into life insurance and disability insurance, says Panaccione. For those with partners, he suggests inking a document known as a buy-sell agreement that includes life insurance and disability, if possible.

Also, if owners are hoping to sell their business to help fund their retirement, the sooner they make plans the better, says Kevin Hoult, a business advisor at the Small Business Development Center at Western Washington University in Bellingham, Wash. There may be situations when an owner might sell his share to a younger partner or even to employeesFor more advice on selling a business, see our story on preparing for retirement

Which investments are appropriate for a 49-year-old intending to retire at 55?

Specifically, Panaccione suggests a three-bucket approach to investing based on a person s near-term, middle-term and long-term goals. For their short-term goals -- one to four years consider investing more conservatively, say, 80% in fixed income or safe investments like CDs and the rest in stocks, he says. For midterm goals -- five to seven years invest roughly 70% in equities and 30% in safer investments. Finally, he says, for long-term goals such as retirement, individuals can consider investing up to 80% of their assets in equities and the rest in safer, less risky investments.

Has this advice changed at all since the downturn?

For individuals and business owners alike, it s vital to maintain a diversified portfolio of investments. Today, more people are choosing to diversify their savings into alternative investments such as commodity and emerging-market funds, says Panaccione. They re also looking at currency trading and private equity deals, he adds. Many people are now trying to hedge their bets and minimize their risks as much as possible.