$109,000 sounds like a lot of money, doesn't it? But when it comes to retirement savings, it's a paltry amount. Yet a Government Accountability Office study found that of the 55-and-older workers who had any retirement savings at all, the median amount they had saved was about $109,000. If that sounds like enough money to finance a retirement to you, think again.

What $109,000 will do for your retirement

Let's say that you retire tomorrow and you have $109,000 saved. If you take just $30,000 per year out of your accounts to live on, your money will last you less than four years (and hopefully your retirement will be a lot longer than that).

If you want your retirement savings to last as long as you do, you need to limit yourself to withdrawing a small percentage of the total balance each year so that you have enough still in the account to keep producing substantial income. If you decide to take 4% of your total retirement balances each year, as some financial experts advise, then $109,000 will be enough to give you just $4,360 per year in income, or just over $363 per month. Unless you're living a truly Spartan existence, $363 a month is unlikely to be enough income for you.

Calendar with time to retire written in red ink

Image source: Getty Images.

What about Social Security benefits?

If you're planning to just live on your Social Security benefits after retirement, think again. For 2017, the average monthly Social Security benefit is $1,369. That's better than $363 per month, but it's still unlikely be enough to finance your entire retirement. What's more, that number may soon be going down.

As more and more Baby Boomers head into retirement, the amount that Social Security has to pay out each month in benefits has been climbing. In fact, the Social Security Administration is now paying out more money than it's taking in through employment taxes. For now, the agency can continue to meet its obligations by drawing on surplus money from the years when taxes were higher than benefits. However, that surplus money is predicted to run out by 2035, at which point Social Security will only have enough money coming in to pay 75% of its benefits. If the average benefit drops by 25%, that would reduce it to $1,026.75 per month -- an even more daunting figure to try to live on.

Of course, it's possible -- even likely -- that legislators will raise employment taxes or otherwise come up with a way to fund Social Security. However, there's an excellent chance that benefits will be reduced somewhat in order to help cover the income gap, meaning that if you are still decades from retirement you probably can't count on your Social Security statement.

Raising your retirement income

If you're less than a decade from your planned retirement date and are short on retirement savings, you're in an uncomfortable situation -- but not an impossible one. The first and most productive thing you can do is to immediately start saving more, up to the annual contribution limit if possible. Workers age 50 and older are allowed to make catch up contributions that increase the annual limit, so you could potentially save a remarkable amount of money in a short span of time.

For example, in 2017 the annual contribution limit for 401(k)s is $18,000, plus a $6,000 catch up contribution for workers age 50 and up. If you're 55 years old and save the full $24,000 per year for the next 10 years, assuming an average annual return of 7% on your savings, you'd end up with $354,806. That's a pretty huge balance for someone starting from scratch at age 55.

Dramatically increasing your retirement savings rate will likely call for some equally dramatic sacrifices on your part. Contributing $24,000 per year means you'd be saving $2,000 per month, so you'd have to either increase your income or decrease your expenses (or a little of each) by $2,000 to make it happen. The good news is that since you're so close to retirement, the sacrifices you'd have to make to get that extra $2,000 per month will be strictly short-term.

Another option would be to delay your retirement by a few years. Not only will that give you extra time to add to your retirement savings, it will also increase your Social Security benefit. Claiming Social Security before your full retirement age results in a permanent penalty of up to 30% to your monthly benefits. On the other hand, waiting to claim Social Security until after full retirement age means that your benefits will be increased by up to 24%. These delayed retirement credits quit coming after you turn 70, so there's little point in waiting longer than that. As a bonus, by increasing your Social Security benefit you're reducing the amount you'll need to save.

Finally, you can look for other sources of income after you retire. Some employers will allow retirees to keep doing their current jobs on a part-time schedule. That both gives you an extra source of income and eases your transition into retired life. If your current employer won't go for this plan, you may be able to pick up a part-time job elsewhere or even start a side gig of your own that can produce a little extra income each month.

Reaching your mid-50s with little to nothing saved for retirement is not an enviable position, but it's not the end of the world either. You'll probably have to work really hard in the next few years to turn your situation around, but if the result is a happy and well-funded retirement, all that effort on your part will be amply rewarded.