According to a survey by EBRI, the Employee Benefit Research Institute, about 20% of workers between the ages of 40 to 59 have less than $10,000 in retirement savings. Now this survey was done before the market downturn of last year.

And another study found the average 401(k) balance is close to $40,000. That is not a lot of money! Another study by Fidelity showed the typical working American household is on track to replace 58% of their income in retirement. That’s not enough!

The Fidelity study found that 51% of households expect to receive a pension. So the rest of you will be relying solely on Social Security so the money in your retirement account will make a big difference in your lifestyle during retirement. The difference could be summed up in where you choose to eat. McDonald’s or the Olive Garden?

The average Social Security monthly check for 2009 for all retired workers will be $1,153 which is up 5.8% from last year. It would be very difficult to live almost anywhere in the US on $14,000 a year and from that the government will also withhold the cost of Medicare.

If you do retire at age 65 with only $40,000 in your 401(k) and you live to be 85, that $40,000 will only give you about an extra $2,300 in income annually  about $44 a week. That’s gas money!

So how much money will you need for retirement? A lot! The first thing you need to review is your budget to see where you can save more. How much does it cost to maintain your current lifestyle? Is this the lifestyle you'll want in retirement? With a little bit of effort on your part, you will be able to calculate whether your savings are on track to reach your retirement goals.

There are many calculators online that can help you figure out how much more you need to save. Start with the company that is providing your retirement plan at work. 

I have also found a couple of very good calculators online. Start at the AARP’s website, or try Money Central.  

Also the American Savings Educational Council (ASEC) has a good calculator on their website, www.asec.org. It is the BALLPARK E$TIMATER. And the large mutual fund companies have very good educational retirement sections as well as calculators at their websites. Check out Vanguard, T Rowe Price, and Fidelity.

If you are coupled, try doing the worksheets together or each of you do one your own and then try together. If you finish the worksheet and the results indicate that you must save more than is available from your paycheck each week, redo the worksheet.

This time, add part-time work if you left it off the first time or raise your projected retirement age from 62 to 67. This will increase your years of savings and your Social Security benefits. If this still doesn't work, raise the retirement age to 70 and plan to work in your retirement.