By and large, U.S. workers estimate they'll retire at age 67 and will live until age 86 -- meaning they'll need 21 years of savings in retirement. But only having roughly 60% of their annual income to live on after age 67 won't cut it, Schwab suggests. How can Americans catch up on their retirement income, especially since 39% of study participants say they won't continue to work in retirement? (Another 46% say they plan on working part-time.) Schwab has a few thoughts on that front too. "We recommend maximizing contributions in a 401(k) at least up to the employer match, considering other tax-advantaged retirement accounts such as an IRA, and finding ways to automate savings," Schwab-Pomerantz says. "We're also having retirement planning discussions with an increasing number of clients who want to be more engaged in investing and how their money is managed." One of those discussions focuses on the high cost of health care for older Americans, which the investment firm says will rise significantly over the next 20 years. That could be a huge "budget buster" for retirees. "Even with Medicare benefits, a 65-year-old couple could need nearly $400,000 to cover out-of-pocket health care costs during retirement, according to research by the Employee Benefit Research Institute, and it's widely accepted that those costs could rise significantly in the future," Schwab-Pomerantz says. "The bottom line for everyone is that health care costs need to be carefully factored into retirement plans." Factoring high health care costs into the mix, it's increasingly apparent Americans are underestimating how much cash they'll need to live on in retirement. It's a miscalculation retirees can't afford to make.