Less than half of Americans believe they're on track for retirement. Here's how to know and what to do if you're not.

• A divide exists about reaching financial goals between confident and uncertain savers.
• Inflation and market volatility are major obstacles to achieving retirement savings goals.
• Starting early and using tax-advantaged accounts can help meet retirement-savings targets.

There's a divide in America between the savers and investors who feel confident they're on track to achieve their financial goals and those who think they're not.

It's why there's so much media attention hovering around the so-called retirement crisis, says Rob Williams, a managing director for financial planning and wealth management at the Schwab Center for Financial Research.

One reason could be that as you get closer to retirement, reality and a feeling of running out of time start to sink in; a once optimistic outlook may get dampened. According to the 2024 401(k) Participant Study by Charles Schwab, among boomer and Gen X respondents, only 40% felt that they were "very likely'" to achieve their retirement savings goals. On the other hand, millennials and Gen Z were more optimistic, at 48% and 50%, respectively.

Respondents cited inflation as the biggest obstacle to reaching retirement goals, followed by stock-market volatility, expenses, credit card debt, and child education.

This creates a big question: How much do you need to save? That can be hard to answer if the goal is a moving target. Retirement savers have to factor in a shifting inflation rate and planned and unplanned life events, including speculating on medical bills and even their life spans. It sounds like a daunting task laced with uncomfortable questions.

One way around it is to take a quantified approach, which can be done by using the annual income multiplier, a scale that shows how much you should have saved for retirement based on your age. The Schwab Center for Financial Research assumes that following this scale would enable retirees to withdraw 55% to 75% of their income for 30 years after retiring.

The table below demonstrates the amount required by each age. For example, if you're 35 with an income of $100,000, you should have between $100,000 to $200,000 set aside for retirement. Based on this scale, you can determine whether you have any catching up to do.

The multiplier effect was tested using income ranges between $50,000 and $300,000, beginning at 25, it assumed that an investor's salary would rise annually based on a 2.28% inflation rate until 65. The saver must set aside 9% to 13% of their income if they start on time. The investment strategy used for the study reflects a glide path portfolio that balances risk based on stocks and bonds.

Obviously, the sooner you start, the easier it will be to meet the required amount for each age range. It follows the tried and true principle, which is that starting early allows a saver to leverage time in the market, even if the allocation is small. Over time, compound interest will balloon the principal investment.

Williams suggests really using up the tax-advantaged accounts with retirement savings vehicles such as 401(k)s and making sure to max out the limit to get the employer match.

"If you've waited and you need to catch up, don't panic. Do what you can because every dollar you save and invest counts," Williams said. Even if you haven't saved anything by the time you're 50, you have at least 15 years to retire. This means, there's still time to ride out volatility, allowing you to add exposure to growth stocks that could help accelerate returns. Investors can also opt for target date funds that will slide toward less risk and more bonds as they get closer to retirement.

Once you're over 50, you have an added benefit called catch-up contributions. These allow you to allocate an additional $7,500 to your 401(k)s or 403(b) and $3,500 for a SIMPLE 401(k).