EVEN BEFORE the recent market meltdowns, David, a 47-year-old engineer who lives in Portland, Oregon, was worried about being able to retire in 20 years. With two young boys in school, a mortgage and only David working full time, he and his wife, Stephanie, were growing increasingly concerned about their lack of savings. So they met with a financial advisor. It turned out that they were right to be worried.

"The advisor said that if we saved very aggressively, I might be able to retire in my early 70s," he says. "It wasn't quite what I was hoping to hear."

And that was before David and Stephanie, like millions of other Americans, saw their retirement accounts pummeled by the credit crisis and its effect on the stock market.

The couple, who asked that their last names not be used, are in a situation that is emblematic of a whole generation of midcareer workers. In the wake of almost daily stock market drops, they might just now be realizing that they are going to have to work much longer than their parents' generation did.

Most of the baby boomers who retire in the next few years have had a definedbenefit plan at some point in their careers, and it will provide them with some guaranteed income. But the next generation, a group of employees who are now 40 to 50 years old, will be the first to have 401 (k) plans as their primary source of retirement savings.

This phenomenon was already in the works before the credit crisis hit, experts note. With defined-benefit plans and retiree health care all but fading away and Social Security at risk, many midcareer workers already were confronting the fact that they would not have enough money to retire in their 60s, experts say. And as the past weeks have demonstrated, it can take just a few days of a plummeting stock market to seriously damage a nest egg.

As a result, employers may soon find their ranks increasingly filled with employees bent on working well past the traditional retirement age of 65.

At the very least, that could cause bottlenecks in companies' plans to move people up the corporate ladders. But it might also mean something else: Firms could find themselves with a population of aging slackers-older workers who are doing just the bare minimum to get a paycheck without getting fired, warns Teresa Ghilarducci, the Bernard L. and Irene Schwartz chair in economic policy analysis at the New School for Social Research in New York.

Even worse, disgruntled older workers could resort to litigation or work sabotage over their lack of retirement savings, experts say.

"At the very least, employers may be facing employee disaffection," Ghilarducci says. "Employee revenge often comes in the form of work slowdown. It's not so hard to do just enough to get by without getting fired."

These scenarios mean that it is more important than ever for companies to have effective performance management systems, thorough financial education programs and processes in place to engage older workers and keep them productive, HR consultants say.

Employers who don't think about this issue run the risk of becoming less competitive, says Alicia Munnell, director of the Center for Retirement Research at Boston College.

"If companies think they are going to be stuck with less- productive workers who are being paid relatively high compensation, they have a financial incentive to help those people accumulate substantive retirement savings," she says.

THE GREAT EXPERIMENT

When 401(k) plans were introduced in 1974, many large employers used them as a supplement to their definedbenefit plans. But over the past 20 years, 401(k) plans have virtually replaced such plans. As of 2005, 63 percent of active workers had access only to a defined-contribution plan, the Employee Benefit Research Institute says.

"We have a great experiment going on right now," says Don Stone, president of Plan Sponsor Advisors, a Chicagobased 401(k) plan consultant. "And that experiment is about seeing whether people are willing and able to fund their own retirement."

Congress has tried to help employees take on this task through legislation. The Pension Protection Act encourages employers to automatically enroll employees in their 401(k) plans and automatically step up their contributions on an annual basis. As part of the law, the Department of Labor approved a number of investments, such as managed accounts and target-date funds, that are basically managed for the employees-so that even if employees do nothing, they should be on track to save for retirement.

But although the Pension Protection Act may help younger employees just starting their careers, consultants aren't sure it will do much for midcareer workers who until now haven't focused on saving for retirement.

"These employees didn't have the same messaging that younger workers have been exposed to in terms of the need to save 10 percent of their pay starting at the beginning of their careers," says Alison Borland, definedcontribution practice leader at Hewitt Associates.