The average American estimates retirement will cost around $1.7 million, according to a survey from Charles Schwab.

Although the exact amount you'll end up spending in retirement will vary from person to person, you'll likely need several hundred thousand dollars stashed away if you want to enjoy your golden years comfortably. Most of today's workers no longer have a pension to count on, and the average Social Security benefit amount is just $1,471 per month -- which is hardly enough for most people to live on.

A jar stuffed full of hundred dollar bills

Image source: Getty Images.

However, many workers are nowhere near reaching their retirement goals. Even among Americans who are only a few short years away from retirement, savings are drastically lower than they should be: The median amount that workers age 56 to 61 have in savings is just $21,000, according to a report from the Economic Policy Institute. For most people, that money will only last a year (or even less) in retirement.

If your savings look better than the average worker's, you're not necessarily off the hook yet. It's important to figure out what your savings goal is before you can determine if you're on track.

How much should you save for retirement?

Your retirement goals will likely be different from those of your neighbors, friends, and coworkers. So, while comparing your savings to what others have stashed away may give you a general idea of where you stand, it won't paint the full picture of whether you're on track to save enough.

To determine how much you should save for retirement, there are a few pieces of information you need to know. First, think about how much you expect to spend each year in retirement. This number might be similar to what you're spending now, or it might be significantly more or less. Factor in all of your everyday living expenses, and don't forget bigger costs like travel and healthcare. You won't be able to predict all of your future costs, but the more accurate your estimate is, the better off you'll be.

Next, factor in your Social Security benefits. You can see what your future benefit amount will look like by checking your statements online, but keep in mind that the age you begin claiming will affect the amount you receive. If you claim before your full retirement age -- which is either age 66, 66 and a few months, or 67 -- your checks will be reduced by up to 30%. Claiming early isn't necessarily a bad thing, but make sure you know how it will affect your monthly checks.

Once you know what you'll be spending and how much help you'll receive from Social Security, you can figure out how much money will need to come from your personal savings. For example, if you estimate that your total retirement expenses will come out to $60,000 per year, and you'll be receiving $20,000 per year from Social Security, that means $40,000 per year will need to come from your savings (assuming you don't have a pension or any other sources of income).

One other important factor to consider is your life expectancy. Americans are living longer than ever, with one-third of today's 65-year-olds expected to live to age 90 or beyond, according to the Social Security Administration. And the longer you live, the more you'll need to save. Unless you have a crystal ball, there's no way you can know your exact lifespan. However, you can estimate it the best you can based on your overall health and family history. If you have reason to believe you'll live a longer- or shorter-than-average lifespan, that can dramatically affect how much you need to save.

Once you have all of this information, plug your numbers into a retirement calculator. This will give you an idea of how much you need to save by the time you retire, plus the amount you should be saving each month to achieve that target.

What if your goals are too challenging to reach?

If you're one of those people in their late 50s with only $21,000 saved, there's a very good chance you won't be able to boost your savings by hundreds of thousands of dollars in just a few years. If that's the case, you have a couple of options: Work hard now to save as much as you can, or adjust your retirement expectations.

No matter how you look at it, you'll need to make sacrifices somewhere -- either now or once you retire. If you want to seriously beef up your retirement fund, you may choose to cut your budget down to the bare bones and work a few years longer than you expected. You might also pick up a part-time job in retirement to help your savings last longer.

Even if you're doing everything you can to save more, you still might have to adjust your retirement expectations. If you have little saved, you may not be able to afford to travel the world or pick up expensive hobbies. That doesn't mean you can't experience an enjoyable retirement, though -- it just means you'll need to get creative and learn to live a more frugal lifestyle. For example, you may sign up for free classes in your community to learn new things on a budget, or you could downsize to a smaller home or move to a more affordable city to stretch your dollars even further.

If you're falling behind on your savings, it's important to realize that sooner rather than later. The more time you have before retirement, the easier it is to make adjustments and get your savings back on track. Even if you're significantly behind and can't afford to save as much as you need, you should still try to boost your savings as much as you can. Doing something is better than doing nothing, and every little bit counts.