Do you have enough to retire?

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People frequently ask how much they’ll need to retire. There is no one-size-fits-all answer. You’ll need what it takes for you to live on. Getting to that number is the first retirement planning step.

It’s a little like making a budget. List all the things you currently spend money on — mortgage or rent, utilities, car payment, gas, health and auto insurance, health care that’s not covered by insurance, clothing, groceries. After you’ve identified all the big-ticket items, add in the smaller items — auto maintenance,  pet food and vet fees, club dues and related expenses, Friday night dinner out, gifts for the grandkids, a week at the shore. Whatever you spend, put it in there. You can always take it out later if you decide you can’t afford it.

Add up the annual total, and you have a rough estimate of what you’ll need in retirement. It may not be much lower than it is now. Most people’s expenses don’t go down a whole lot when they stop working, but you will lose some costs of commuting and other expenses related to working. And if you have been saving for retirement, you don’t have to include that.

Next, go to the Social Security website at, and figure out how much you and your spouse are entitled to at various ages. then multiply those numbers by 12. Note that the totals go up significantly the longer you wait to take your benefit. If you or your spouse are entitled to a defined benefit pension from a current or previous employer, call the company benefits office and find out how much it is. In most cases, there is no advantage to delaying past age 65 because the pension won’t increase.

If you have 401(k)s, add them together and multiply the total by 4 percent. That will give you a rough idea of how much you can draw once a year. Divide that by 12 to see how much you can afford to spend every month.

Add all these income totals up, and compare them to your costs. If you aren’t bringing in enough to cover your nut, you’ll need to work and save more. But if you have enough, congratulations.

Your next step is to find a retirement planner who will help you make this analysis more sophisticated. In particular, you’ll want to see the effects of inflation on your retirement. It can be a killer. You also may want help considering ways to use something such as an annuity to make your income more stable, especially if you don’t have a defined benefit pension.

None of this is rocket science, but it isn’t simple either. The reward for a little hard work is a better sense of your ability to live securely during your oldest and frailest years.