The retirement savings gap is the difference between how much money you'll need to maintain your desired lifestyle throughout retirement and how much you've actually saved. It's the shortfall that could force you to work longer, live on less, or risk running out of money in your later years—and it's a challenge facing millions of Americans who haven't saved enough for the retirement they envision.

Several factors contribute to retirement savings gaps. Many people start saving too late or contribute too little, missing out on decades of compound growth. Others underestimate how long they'll live and how much they'll need, plan based on overly optimistic investment return assumptions, face career setbacks or emergencies that force them to tap retirement savings early, or simply haven't had access to employer retirement plans or matching contributions. Healthcare costs, inflation, and longer life expectancies have all widened the retirement savings gap for current and future retirees.

The good news is that a retirement savings gap can be addressed—the earlier you identify it, the more options you have. Strategies to close the gap include increasing your savings rate now, working a few years longer to both save more and delay tapping savings, reducing planned retirement expenses or downsizing, maximizing Social Security by delaying benefits, continuing part-time work in early retirement, or optimizing your investment strategy for your time horizon. Understanding your retirement savings gap is the first step toward creating a realistic plan that aligns your resources with your retirement goals.