Crunching the Numbers: How Much Do You Need to Retire?

This is the time to be ultraconservative in your financial planning. Always presume the cost of living is going to go up in retirement, never down. You won’t regret it,” she counsels. “Overfunding for consumption is your least painful option these days.”

Surely no one wants to wind up a pauper at 80, but before you get all panicky about the hard numbers, take a deep breath—you should consider some of the cosmic questions, too, says Lee Eisenberg, author of The Number: A Completely Different Way to Think About the Rest of Your Life. He suggests that people go beyond the basics of food, shelter and health care and really think about what they want to be and do as retirees. “Ask yourself, what am I going to need money for? What kind of life do I want to live that will bring satisfaction and a sense of meaning?” Eisenberg said. “People have to wrestle with what really matters in their life before they will know how much money they will need. It’s not about a couple of clicks on a calculator and boom you’re done. Your current lifestyle might not be your best lifestyle.”

Personal finance writer Kerry Hannon is a contributing editor for U.S. News & World Report and a former reporter and editor for Money, Kiplinger’s Personal Finance and Forbes.