Saving up for retirement is hard. At least that's the conclusion that seems to make the most sense following the release of the latest Retirement Confidence Survey from the Employee Benefit Research Institute (EBRI).

The EBRI has been surveying Americans on their retirement situation for 26 years, and like its previous surveys, this year's results offer up intriguing insight into American workers' preparedness for retirement.

In a nutshell, many Americans are still falling short of what they're likely to need in retirement savings. Are you one of them? Read on to see how your savings stack up against the average American and to learn what you can do to give your retirement savings a boost.

How do you compare?
The EBRI breaks out current workers' retirement savings by asset levels, and while the survey doesn't tell us how much the average American has saved up across all asset groups, the Federal Reserve has previously indicated that the average American is sitting on a median $60,000 retirement nest egg.

That $60,000 figure, however, only tells part of the story, and EBRI's study arguably paints a picture of Americans' retirement savings that's more telling.

Specifically, the EBRI reports that more than a quarter of all Americans have less than $1,000 in retirement savings, excluding their home. Further, a whopping 64% have less than $50,000 socked away for retirement. And just 14% have amassed savings in excess of $250,000.

That's potentially a big problem because it's commonly recommended that retirees withdraw only 4% of their retirement savings per year. Given that 4% rule, a person with a $50,000 nest egg would withdraw just $2,000 from retirement savings every year, and that's hardly enough to live on. People with larger savings accounts, such as those with $100,000, would also come up shy. In fact, the 4% rule means that if a retiree wants to withdraw $20,000 in retirement income annually from their savings, that person would need a portfolio worth more than a half of a million dollars.

Relying on Social Security
Despite Americans' seemingly lackluster savings, attitudes about financial preparedness for retirement are pretty good.

Overall, 78% of Americans are very or somewhat confident that they'll have enough money in retirement to pay their basic expenses, and only 12% are not at all confident.

That confidence could stem from the knowledge that most people will receive Social Security income when they retire.

Social Security income is paid out to workers who have contributed to the program via payroll taxes for roughly 10 years. Americans can start receiving Social Security income as early as age 62; however, they won't receive 100% of their monthly Social Security benefit unless they wait to claim Social Security until their full retirement age, which is currently 66.

Currently, the average retired worker is receiving $1,341 per month from Social Security, and if you include spousal benefits, then the average monthly household's haul from Social Security climbs to $2,212. With planning, that could be enough to cover a lot of most Americans' basic expenses in retirement.


Making changes
Unfortunately, expenses in retirement can be anything but basic.

For instance, one of the biggest financial burdens facing retirees is healthcare, and although Medicare picks up some of healthcare's cost, it doesn't pay for everything.

According to Healthview Services, the average healthy couple retiring today will spend $395,000 on Medicare B, D, and supplemental Medicare plan premiums and out-of-pocket cost sharing, such as co-pays.

To keep those healthcare costs from gobbling up the lion's share of your retirement income, it may be time to make some changes and build a bigger nest egg. Some things that you can do include:

  • Enrolling in a 401(k) plan automatic escalation program.
  • Investing in a tax-advantaged health savings account or flex spending account.
  • Contributing to traditional or Roth IRAs.
  • Contributing the maximum catch-up contribution if over age 50.

While not every employer offers auto-escalation programs, many employers do offer them. These programs automatically increase the percentage of your income that gets contributed every year to your retirement plan by an amount you specify, so they're a great way to simplify your retirement savings strategy.

Tax-advantaged health savings accounts (HSAs) and flex spending accounts (FSAs) may also free up more money to set aside for retirement. Contributions to HSAs and FSAs are made with pre-tax dollars that can reduce your tax bill, and in the case of HSAs, contributions can be rolled over from year to year.

Traditional and Roth IRAs are another valuable tax-advantaged retirement savings tool that you can use. People of any income can contribute up to $5,500 to a traditional IRA (a traditional IRA's tax deductibility, however, does phase out with income), and married couples who file jointly and have a modified adjusted gross income that's below $183,000 can contribute $5,500 in after-tax dollars to a Roth IRA that can grow tax-free for retirement.

Also, the IRS allows Americans over age 50 to contribute an additional $6,000 to their workplace retirement plans, such as a 401(k) plan, and that means that up to $24,000 per year can be contributed to these plans this year. Workers can also contribute an additional $1,000 to a traditional or Roth IRA, or a total of $6,500 this year, too.