Can I afford to retire?

Many authorities in the financial planning field say that you need 80% of your pre-retirement income to maintain your lifestyle after retirement. That figure may or may not be good for you; if you're one of the people who walks to work works in his or her home, for instance, you won't save a penny on commuting. There are those who will still want the latest clothes whether or not they still have to impress business colleagues or not. And, of course, a lot of us want to travel more after retirement than we did before. Click to view a budget worksheet that will help you to find out how much you really need to have a comfortable life.

We will help you do a simple and realistic analysis of your post-retirement income. As simple as it is, it will take some time, dedication, and phone calls on your part to complete. If that seems like a lot to ask, it is. But some time and planning now could make a big difference to you later.

Your first task is to call the Social Security Administration and ask their assistance in figuring out how much you will get by way of retirement benefit from the government. Next, talk to the Human Resources department where you work to get an estimate of the pension benefit to which you will be entitled.

The next step is to project 80% of your current salary -- the amount you will use as your benchmark for post-retirement income needs -- into the future. Click for the table, chart, and directions for calculating this amount. You will then be able to calculate whether or not you can afford to retire.