BOSTON ( TheStreet) -- Citing the "squeeze of the economic downturn," three out of four 401(k) participants are likely not on track to meet retirement goals based on their current 401(k) balance, plan contributions and projected Social Security payments, a report released today by investor adviser Financial Engines ( FNGN) says.Of those 72% plan participants who are off-track, Financial Engines projects that the typical participant will be able to replace only 45% of their preretirement income, compared with a 70% goal. On a positive note, the report showed that participants in plans with automatic enrollment and Qualified Default Investment Alternatives are better off than those without. The 2010 Financial Engines National 401(k) Evaluation analyzed the portfolios of more than 2.8 million 401(k) participants from 272 employer plans. The report estimates the amount of income each participant can expect in retirement from their current 401(k) savings and investments, evaluating each portfolio on the basis of risk and diversification, company stock and participant contributions. Not included in the research was the impact of defined benefit income sources, previous 401(k) balances, IRAs or Roth IRAs. "This study is a wake-up call showing that employees continue to make retirement mistakes, which have been compounded by the financial crisis," Jeff Maggioncalda, president and CEO of Financial Engines, said in a statement. The report also found that the economic downturn has hurt participant savings rates, with 39% not saving enough to get the full employer match, up from 33% in 2008. Of participants under age 40, 47% failed to save enough to get the full employer match. Participants earning between $25,000 and $75,000 per year had average lower 401(k) savings rates this year than two years ago (6% this year compared with 7% in 2008), "reflecting the serious impact of the economic crisis on middle-class working Americans," the report says. According to the report, while automatic enrollment is helpful in getting participants into the plan, automatic savings escalation (increasing participants' savings rates each year to an upper limit) is "key to getting them saving enough for retirement." Sixty-seven percent of participants in plans with automatic escalation save enough to get the full employer match, compared with just 52% of participants in plans without automatic escalation. With the U.S. Department of Labor finalizing QDIA regulations in October 2007, the policy is starting to help newer participants. Younger participants with lower salaries and lower account balances are benefiting the most, as they are more likely automatically enrolled into an age-appropriate default option, often Target Date Funds, approved as such an option. Financial Engines makes a case that 52% of participants under age 30 in plans with a QDIA have the appropriate risk and diversification for their age, compared with just 12% in plans lacking one. In addition, 50% of participants earning less than $25,000 per year in plans with a QDIA have age-appropriate risk and diversification, compared with just 24% in plans without a QDIA. -- Written by Joe Mont in Boston. >To contact the writer of this article, click here: Joe Mont. >To follow the writer on Twitter, go to http://twitter.com/josephmont. >To submit a news tip, send an email to: firstname.lastname@example.org.