NEW YORK (MainStreet) — The American nest egg is to be cracked open for emergency use only. A new study finds that less than half of current retirees use their retirement investments for income -- instead holding the assets as an emergency fund.

Of those retirees who do tap retirement investments for income, many take "as much as possible" as opposed to "what they really want." Only households with a higher level of wealth achieve "a true balance of wants and income." As a result, many retirees have little room for error, according to a study fielded by Hearts & Wallets.

"Many Americans view their assets for use only in an emergency rather than as a retirement income source," says Laura Varas, a partner of the research firm. "The one million households who are both retired and have $2 million-plus do have a lot of money -- $7.2 trillion -- but they only represent three percent of post-retiree households."

But that nest egg may soon be served up as regular fare for retirees. Americans still on the job but planning for life after work say their personal investments will play a bigger role in retirement income. More than half of the households surveyed (58%) say they plan to tap retirement accounts. Fully 80% of households with a primary breadwinner between the ages 53 to 64 who plan to keep working for at least five more years say they will use personal assets in retirement.

However this same age group has accumulated only 55% of their retirement assets goal. Considering all age groups, only one in five (21%) is at 80% or more of their self-stated retirement asset goal.

"This suggests many more American households will be, as a recent focus group participant put it, 'living on the edge' when taking income from personal assets in the future," the study concludes. The analysis is based on data of nearly 5,000 U.S. households, including 3,500 households aged 53 years and older with approximately 2,000 households in retirement.

The study notes that of all American retirees – 33.7 million households that control $15.1 trillion in assets -- only one third are the classic 65 to 74 year-old age stereotype. And only one in 10 has the oft-cited "mass affluent" assets of $500,000 to $2 million. Finally, while half of 70-year-olds have pensions, only 30% of 50-year-olds do.

--Written by Hal M. Bundrick for MainStreet