NEW YORK (MainStreet) — Despite the fact that 88% of investors feel confident about having enough money to live the lifestyle they want in retirement, their fears loom large, according to a new Legg Mason study.

"We fear the unpredictable, catastrophic event that can decimate retirement savings," said Matthew Schiffman managing director and head of global marketing at Legg Mason Global Asset Management.

The report indicated that outliving retirement funds is also among worker's top five retirement fears.

"Variables that can help bridge the gap are finding new ways to increase income and savings as well as reduce costs both now and in retirement," said Catherine Collinson, president of Transamerica Center for Retirement Studies (TCRS).

A $127,000 nest egg would result in about $5,000 per year for about 25 years in retirement, which even with Social Security benefits may not be enough to live on.

"Given the significant drag taxes can have on a portfolio, it is critical that investors understand the tax efficiency of their portfolio," said Duncan Rolph, partner and managing director with Miracle Mile Advisors. "There may be some investments with high expected returns but are very tax inefficient, such as taxable credit strategies, corporate bonds, hedge funds and other actively managed accounts with short-term trading."

Early withdrawals are also subject to taxes, and for those under 59.5 years old, a 10% penalty applies in most cases.

"Avoiding loans and early withdrawals from retirement accounts is one of the most important things investors can do to preserve their retirement savings," Collinson told MainStreet. "Simply put, loans and early withdrawals can severely inhibit the growth of long-term savings."

In addition to automatic deposits into a retirement account, having a financial plan specifically written for retirement can help workers stay on a savings track but only 12% globally have a written strategy compared 35% Americans who do not have a plan in writing, according to the 2014 Aegon Retirement Readiness Survey.

"Baby Boomers who are planning to work past 65 need to ensure that their job skills are up-to-date and in step with employers' needs," Collinson said. "The job market has been rapidly changing and evolving, so it's absolutely critical to have an understanding of the types of jobs that will be available and acquiring or maintaining the skills that are needed for those jobs."

The Aegon study further revealed that globally 61% do not have a backup plan compared to 59% of Americans.

A back up retirement plan or Plan B in the event of an emergency can include insurance products, such as life, disability, critical illness and long-term care, such as the MedAmerica Simplicity policy.

About 82% of those aged 55 to 64 believe it will be more difficult for future generations to save for retirement even though the younger the worker, the more time for successful saving.

"One big difference between Gen X and Baby Boomers is that they have more years to live before retirement and more time to plan, save and grow their nest eggs," Collinson said.

Even though the clock is ticking for all working generations there are five decisions that can help workers make a positive impact on their retirement success. They include changing spending habits, taking a more global approach to investing and incorporating products other than just stocks and bonds. Legg Mason researchers, however, did not include which investments other than stocks and bonds positively impacted worker's retirement portfolio in its study.

--Written by Juliette Fairley for MainStreet