Most people don't know whether they are on track to replace four-fifths of their income in retirement.

U.S. employees’ retirement preparedness has steadily improved this decade, according to new research, but it is on track to decline year thanks to jitters over politics and the economy.

Financial Finesse, which provides workplace financial wellness programs in the U.S., reported that 19.7% of employees in 2013 said they were on track to meet their income-replacement goal in retirement, up from 17.4% in 2012 and 16.6% in 2011.

The improvement was likely the result of more robust workplace financial education and advice, as well as enhancements to the design of company-sponsored retirement plans, Financial Finesse said in a statement.

Demographics Matter

The study found that retirement preparedness varied significantly by demographics. Take gender. Twenty-six percent of men said they were prepared for retirement, versus 17% of women.

Sixty-three percent of women could not say whether they were on track for retirement or had not run a retirement projections and 21% said they were definitely not on track, versus 57% and 17% of men, respectively.

Similarly, 35% of respondents with incomes above $199,999 claimed to be on track with their retirement preparations, compared with just 8% of those with incomes between $20,000 and $34,999. Conversely, those with lowest income were much more likely than high earners to be uncertain about their retirement preparedness or not on track at all.

And people 65 and older were much more prepared for retirement than those younger than 30.

The retirement-preparedness disparities were starkest between younger, lower-income women and older, higher-income men.

For example, 9% of women under 45 making less than $60,000 a year versus 40% of the men 55 and older making $100,000 or more a year said they were on target to replace at least four-fifths of their income in retirement.

Eighty percent of the women and 97% of the men reported that they contributed to a retirement plan at work.

Forty-nine percent of the women said they had a handle on their cash flow, compared with 89% of the men. Thirty-seven percent of these women said they were comfortable with their debt, versus 81% of the men.

And 70% of the women paid their monthly bills on time and 31% regularly paid off their credit card balances in full, compared with 99% and 78% of the men, respectively.

The report said repeat users of financial wellness programs had shown significantly more progress in retirement preparedness than non- or one-time users.

In a statement, Financial Finesse noted that those who regularly used its online financial wellness assessment had increased their retirement plan preparedness by 76%.

Uncertainty Worries Investors

According to the report, employees are currently struggling with increased levels of economic and political uncertainty, jeopardizing progress they made in 2013.

Although retirement preparedness steadily improved from 2011 to 2013, it has progressively declined in the first three quarters of 2014, the report said.

“We have yet to determine whether this is a sign of regression, or just a bump in the road,” Financial Finesse says in the report.

The declines appeared to be correlated with stagnant wage growth and falling investment confidence, particularly among the millennial generation, it said. Younger employees are facing record high student loan debt and a general lack of trust in the market owing to setbacks they witnessed during the recession.

“The uncertainty is an emerging problem, and one that both employers and employees will need to proactively address,” Financial Finesse’s founder and chief executive, Liz Davison, said in the statement.

Davidson said the firm’s financial educators were increasingly working with employees who had sufficient assets to retire, but were so concerned about the future that they are opting to work longer.

Check out Wells Fargo’s Wimbish: Navigating the 30-Year Retirement on ThinkAdvisor.