The tricky thing about planning for retirement is that in the absence of a crystal ball, it's hard to determine what our expenses will look like and for how many years we'll be covering them. The former, however, can be estimated with more ease than the latter -- especially if you operate under the assumption that you'll need roughly 80% of your pre-retirement income each year to cover your living costs later in life.

How much money does that translate into annually? In 2016, the median income in the country was $52,700. If we use that 80% figure, we arrive at $42,160 per year.

Serious older man


Where will that money come from? A portion will stem from Social Security for most workers, but the rest needs to come from savings. And that's where a large number of Americans risk falling short.

GOBankingRates reports that 42% of Americans have less than $10,000 saved for the future. The same holds true for one-third of adults 55 and over. Yet most Americans are planning for a 23-year retirement, according to TD Ameritrade, which means that conceivably, the typical household will need $969,680 to pay the bills during that period.

As I mentioned before, some of that will come from Social Security. The average recipient today collects $1,404 per month, or $16,848 per year. If we multiply that over a 23-year period, we arrive at $387,504. Notice the problem? That leaves 42% of Americans and one-third of older workers with a potential $572,000 to $582,000 shortfall based on their current savings level of $0 to under $10,000. And that's certainly not ideal.

Will you have enough income in retirement?

Why are so many Americans lacking in savings? For some, it stems from an inability to curb their spending and prioritize their nest eggs. For others, it boils down to a serious misconception about Social Security's buying power. But regardless of why countless workers have managed to land in this boat, one thing's for sure: They need to do better savingswise, or they won't manage to get by in retirement. It's as simple as that.

If you're among the 42% of Americans with less than $10,000 in retirement funds but also fairly young, then all is certainly not lost. That's because you have the rest of your career to build a substantial nest egg. In fact, let's assume you're 40 years old -- not particularly young from a career standpoint, but certainly young enough to not fall into the "older worker" category. If you start setting aside $650 a month between now and age 67, and your investments generate an average annual 7% return during that time, you'll be sitting on a $581,000 nest egg. And that's enough to make up for the shortfall highlighted above.

If you're an older worker, however, you'll need to get serious about your retirement savings really quickly, because frankly, time isn't on your side. Still, you have a chance to catch up if you make changes immediately. Currently, workers 50 and over can put up to $24,500 a year into a 401(k). If you have access to a company plan and hit that limit for a 12-year stretch, you'll pad your nest egg by $432,000, assuming that 7% average annual return. And that'll certainly get you a lot closer to where you need to be.

Furthermore, if you're nearing retirement with not a lot of money saved, it pays to consider working a few extra years past your anticipated retirement age. This will not only give you a chance to add to your nest egg, but shave a little time off that 23-year estimate, thus allowing your existing savings to go further.

No matter what steps you take to boost your savings, remember this: That 23-year assumption isn't so far off, so the more you're able to sock away, the greater your chances of avoiding financial trouble at what could come to be the most vulnerable point in your life.