When it comes to retirement, millions of Americans plan to depend on Social Security as their only source of retirement income.

“They start collecting as soon as they retire and that reduces the amount of income they will have for the rest of their life,” says Matt Lebo, a certified financial planner at Sequinox Financials.

According to a survey released by Ubiquity Retirement + Savings — a leading financial technology company whose mission is to help people save for retirement — 80% of Americans say that saving for retirement is important. However, only 56% actually are saving.

“Planning for retirement is like running a long-distance race,” says Bernie Bostwick, president of Ambassador Advisors.

“The earlier a person starts to save for retirement, the more time is on their side to help them accumulate more money and allow the compounding of the interest they earn to work for them. If they do this, they are more likely to win the race,” Bostwick says.

What keeps people from saving now for the golden years? Cost of living is reportedly the top reason people don’t save for retirement.

Bureau of Labor Statistics data show that 75% of workers who earn at least $36,000 on a full-time basis participate in a retirement plan. However, among workers with average salaries of about $24,000 per year, only 25% participate. In addition, about 20 % of Americans aren't even offered a plan by their employer.

How much money will you need to retire?

Most people don’t seem to have a clue as to how much they will need. A report by the Transamerica Center for Retirement Studies found that 4 in 10 workers who provided an estimate of their retirement savings needs in 2017 said that they "guessed" the amount needed.

When a client asks Lebo how much they’ll need to retire, he’s quick to redirect the question by asking the client what retirement looks like for them.

“Everyone is different, there’s no magic number. Retirement needs will vary based on their spending habits,” Lebo says.

Saving for retirement might be easier than you think. Here is what you can do to stay on track:

  • Set a goal for your retirement savings.
  • Invest 15% of your income in tax-advantaged accounts like a 401(k) and Roth IRA.
  • Go beyond 15% — max out your 401(k) and other investing options.

Don’t spend your raises. Many people increase their lifestyle to match their income increase. A fancier car. A new kitchen. But remember that investing 15% of your income also means investing 15% of any pay increases.

Stick to a monthly budget. A budget helps you take control of your money and plan how every dollar will be spent.

Stop overspending on nonessentials like going out for lunch with your coworkers every day or signing up for a cable package with premium channels you never watch.

Get rid of any debt. Every dollar that goes to a debt payment is a dollar you could have invested.

Start saving money. Some people didn’t start saving until they were in their 30s, and others waited until their 40s to prepare for retirement. Don't wait any longer, start saving now.

“It’s a great idea to sit down with a financial adviser to help you determine what your specific needs will be and monitor your progress toward your retirement goals on a regular basis,” Bostwick says.

Here are some common mistakes people make when saving for retirement:

  1. Withdrawing funds early. You may be tempted to tap into your retirement account when planning a home improvement project, a grand vacation or how to pay for a child’s college tuition.
  2. Borrowing from a 401(k). Workers today stay at a job for an average of just under five years, according to the most recent data available from the Bureau of Labor Statistics. Most 401(k) plan loans must be repaid within five years. If you fail to do that, your employer will treat the loan balance as a distribution, triggering income taxes and the 10 percent early withdrawal penalty if you're under age 59½. You could also be forced out of your plan and prevented from contributing in the future.
  3. Assuming automatic enrollment is enough. More people are likely to participate in a retirement plan, such as a 401(k), that has an automatic enrollment provision. This is a good practice but the plan needs to be reviewed each year to make sure goals are being met. You may need to increase what you are putting into the plan.
  4. Forgetting to rebalance. The proportion of the retirement savings you invest in different asset classes — like stocks or bonds — is a personal decision, usually based on factors such as how close you are to retirement and how much risk you can tolerate. It’s often recommended for investors to rebalance their accounts every quarter, regardless of market conditions, and again when the stock market rises or falls by 5 percent or more.
  5. Not diversifying your retirement assets. A comprehensive retirement plan is more than just a 401(k). In order to take advantage of up markets while protecting yourself during down markets, you should put your money in a variety of vehicles, including IRAs or 401(k)s, Roth accounts, investments, deferred annuities and life insurance.