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The gap between what U.S. households need for retirement and what they have has grown in the last five years from $6.6 trillion to $7.7 trillion — mind-numbing numbers that don’t mean much until you look at individual savings levels compared to the reality of what it takes to pay the bills in retirement.

Then you realize, most people will have to work until they drop.

Alicia Munnell, director of the Center for Retirement Research at Boston College, which calculated the retirement income deficit figure, testified Thursday about it before the  U.S. Senate Special Committee on Aging. She warned that things are only going to get worse for these reasons:

  • Social Security full retirement age is rising. “For the typical earner who retires at 65 (and thus won’t get full benefits), the (income) replacement rate will drop from about 40 percent today to 36 percent once the transition is complete,” Munnell says.
  • Medicare premiums are going up. Part B premiums are expected to increase from 5.4 percent of the average Social Security check for someone retiring in 1990 to 10.4 percent for someone retiring in 2030.
  • More Social Security benefits are taxed. Individuals with annual retirement incomes of more than $25,000 and married couples with more than $32,000 pay taxes on up to 85 percent of their Social Security benefits. In 1985, only about 10 percent of beneficiaries had to pay taxes on benefits. Today, almost 40 percent of households pay taxes on benefits, and by 2030 more than 50 percent of households are expected to owe taxes on their Social Security.

Suggested retirement savings targets

Age What you should have saved
30 50% of your annual salary
35 100%
40 200%
45 300%
50 400%
55 500%
60 600%
65 700%
67 800%

Source: Fidelity Investments

What makes it worse is that Americans are saving less today. The average working U.S. household has virtually no retirement savings. The median retirement account balance is $2,500 for all working-age households and $14,500 for near-retirement households, according to the 2013 Survey of  Consumer Finances from the U.S. Federal Reserve.

If you recognize yourself in these statistics and you are approaching retirement, Munnell advises taking these four steps:

  • Work longer. Working longer shrinks the amount of time you’ll live in retirement and how far your nest egg needs to stretch.
  • Put off claiming Social Security. You’ll increase your benefits 76 percent if you delay claiming from 62 to 70.
  • Save more. The longer you work and put aside retirement savings, the more you’ll have when you really need it.
  • Tap your home equity. You can sell your home and downsize into a less-expensive alternative. Or you can take out a reverse mortgage. You don’t have to pay these loans back until you move, sell the house or die. These loans once carried big risks, but today the U.S. Department of Housing and Urban Development tightly regulates them, and they are safer.

I find these conclusions depressing — and downright scary for my mid-30s children who seem to have gotten a later start in life than I did and who don’t have an old-fashioned defined-benefit pension to augment their 401(k)s and Social Security benefits. I’m working on having enough left to help them out when they are my age.

Here are four ways to stretch your Social Security.