There's a myth going around that I'd like to swat down. It's supported by working people — maybe even you — who aren't saving enough money to live comfortably when their paychecks stop. The myth says you'll be OK, even if you don't increase your 401(k) contributions or other savings. You'll make up for your small nest egg by working longer. The usual phrase is, "I'll work till I drop."

Power save to strengthen your retirement finances. — Getty Images

Many retirement experts tell the same tale. If everyone works and saves until 70, most of the retirement income problem does go away.

That's a big "if." In 2011, only 32.3 percent of men and 18.7 percent of women age 70 or older were still employed in some capacity, the Bureau of Labor Statistics reports.

"It's terrible public policy to advise people that they can plan on solving their financial problems by working longer," says Jack VanDerhei, research director of the Employee Benefit Research Institute (EBRI). "You should take control of your retirement now, while you have the chance." That means reducing expenses and pouring everything you can into savings during the time you have left to work.

You might be able to stay employed until 70 if you're healthy, lucky, well-off, work for a company that keeps older employees, or run a business of your own. But the more familiar story is that of older workers forced out of jobs they'd hoped to keep.

Half of the people retired today say they left work early and unexpectedly, most because of health problems, disability or changes such as downsizing, according to an EBRI survey. Those aren't great odds, if you're counting on working to pay the bills.

You can "power save"

The good news is that you can add a surprising amount to your nest egg in just a few years if you squeeze your spending and make saving money your priority.

Say, for example, you're 50, earning $70,000. You've saved $100,000 in a 401(k) and are contributing 7 percent of your pay — $4,900 a year. If you make no change, and have to leave your job after five years, you'll have $169,000. But if you double your contribution, you'll have almost $200,000 — a much more comfortable cushion. If you double your contribution and work for 10 more years, you'll have $336,700. That could be $531,000 if you make it to 65.

(To estimate the gains, I took the past 10-year returns of Vanguard's U.S. Balanced Index Fund, which holds 60 percent in stocks and 40 percent in bonds — the classic investment mix. The stock and bond portions each follow a major market index. Over the decade ending last November, that portfolio earned almost 7 percent a year, after fees.)

Next page: A bigger nest egg is just the start. »