Figuring out how much you'll need to have saved for retirement can be really complicated. While there are a few different ways to calculate what's needed to support you, many people base their estimates on outdated rules or forget big expenses they'll likely incur. 

You don't want to set your savings goals too low and end up running out of money. So it helps to know some of the common reasons people often save too little. Here are four of them. 

Binder labeled retirement savings plan with calculator sitting on top of it.

Image source: Getty Images.

1. You're following the 4% rule

This rule says you can make a withdrawal in your first year of retirement equal to 4% of your investment account balance. Then, you can increase withdrawals each year to match inflation. This is supposed to protect you from running out of money.

But the 4% rule is outdated. Projected returns for invested funds are lower than they used to be thanks to falling bond rates, people are living longer, and healthcare costs have increased rapidly. There's now a pretty good chance you'll run out of money if you follow the 4% rule. 

If you need to make smaller withdrawals from your savings to make the money last, you'll need a larger nest egg to provide you with enough income. With the 4% rule, $1 million in retirement savings would give you $40,000 to spend. But if you withdraw just 3.5% instead, you'll need about $1.14 million to have the same spending power. 

2. You're forgetting about inflation

When you look at retirement savings calculators and see that you'll have a pretty hefty sum of money in the future, you may assume you're all set. If you're retiring in 30 years and your retirement calculator says you'll leave work with $1 million in the bank, this can seem like a pretty good amount.

But you need to think about how inflation will erode the buying power of that projected nest egg. In 30 years, that $1 million adjusted for inflation will be worth just $401,617 -- your spending power is more than cut in half. So plan for what your money will actually be worth. 

3. You aren't planning for big healthcare expenses

Many people have misconceptions regarding how generous Medicare will be in covering their healthcare costs. Medicare doesn't cover long-term care at all and many other things you may need as a senior, such as hearing aids or most dental care.

Medicare also has high co-insurance cost you'll have to pay, and you may decide to pay additional premiums for a Medigap or Medicare Advantage plan to try to get more comprehensive care. Seniors also tend to need a lot of healthcare.

Because of this, out-of-pocket estimates for healthcare spending in retirement can total in the hundreds of thousands. You could quickly run out of money if you haven't planned for this and use up your nest egg on a serious medical issue. 

4. You're overestimating what Social Security will provide

Social Security benefits will undoubtedly help you out during retirement -- but many people overestimate exactly how much income these benefits will provide.

Your Social Security checks are designed to replace only around 40% of the money you were making before retirement, but you'll likely need at least 70% to 80% of that -- and sometimes a lot more. 

It's important you understand how much income Social Security is likely to provide, compare this to the amount of income you'll need, and determine the amount you must have invested to give you the necessary funds. 

Don't underestimate what you'll need

Underestimating your retirement income needs is a recipe for disaster. It's always better to err on the side of caution and assume you'll need more than you think. You'll ensure you won't live your retirement in fear of running out of funds.