Excel, or other spreadsheet software, is an excellent tool for this type of 'stubby pencil' thought process. I'd categorize and quantify my expenses, my income and savings/investments, projecting probable changes in the future years, and seeing what the net result is each year. If income is less than expenses, subtract the difference from savings/investments. If expenses are less than income, add the difference to savings/investments. (The math can all be done automatically by formulas embedded in the spreadsheet.) Review your suppositions regularly, especially where your money is being spent, and make adjustments accordingly. You should also include a return on investment growth factor for your savings/investments.

This is also an excellent tool for visualizing what your post-retirement lifestyle might be and how much discretionary money you might have.

You also need to consider what you want to do in retirement. If you ever wanted a good weekend to last forever...well, that's retirement (at least for us [smile]).

But you need to be to AFFORD whatever extra activities you want to do.

Hobbies? Travel? Go back to school (not necessarily for a degree; many who retire in college towns just enjoy sitting in on classes)?

Retirement is best viewed in phases. You will have an active retirement phase, then as you age and start to slow down, you'll spend less on outside activities. Healthcare costs may start to rise as age-related ailments begin.

Stress-test your plans thoroughly. You must feel confident you can survive not just if one or two things go wrong, but when three or four or half-a-dozen things go wrong in quick succession.

As a couple, you want to approach retirement having already discussed not just your goals and hopes, but also alternatives for what one should do if something happens to the other spouse/partner.

A lot of it depends on whether you and/or your spouse have a defined benefit pension, and what your projected Social Security payments might be. Those people covered by pensions may need less 'money' than those who do not have pensions.

Run some social security scenarios. Check with your employer about the various pension options. Add up your guaranteed* income from those sources (and any annuity products you might currently own) and see what the gap is between that and your desired retirement income. That's what will need to be covered by investments.

"What's your number" advertising doesn't really help, and usually makes people anxious about their futures.

Good luck.

*Private pensions may fail but most are covered by the PBGC to a point. Public pensions may be unfunded but taxpayers are on the hook for those.

ldstarr, you said that your income exceeds your expenses. Have you been saving that extra income? We saved about 25% of our gross income each year. When my beloved boss was leaving, I knew I might want to retire, so I started throwing all extra $$ at our mortgage and paid it off. I ended up working a few more years, but it has been lovely not having any bills except utilities and taxes. We travel four - five times/year, and when my husband retires in four years, we will travel a lot more. So our expenses will be higher than now, which is why we are still saving.

I agree with your frustration that the models don't help you figure out what you need. We ended up with a financial advisor who is in the top 100 in the USA. He said we were on track and managed our investments. That was a big help.

Another thing to consider is if either of you dies before the other can the survivor live comfortably on what is left. Hubby is not dead but in nursing home so have had to divide our assets and am currently living on my pension and SS plus some savings. Luckily I do have the savings to use which many spouses would not.

And maifleur's experience is why one needs to run multiple "worst case" scenarios BEFORE retiring. No couple can assume that they are going to die simultaneously, or that neither will ever become disabled.

My MIL was absolutely "certain" that she was going to die before her beloved husband. She lived 12 yrs long than he did. All their projections for retirement were based on their both collecting Social Security. If we had not convinced her to eventually sell her home, she would have ended up struggling financially, instead of being able to live in comfort during her final years.

Thank you all for the detailed help. We currently save approx. 30% of our income, primarily in "retirement type" accounts. My DH has his business (sole prop) so we put the maximum permitted by the IRS into his Solo 401(k). My employer offers a 401(k) plan and provides at least some match on the 1st 5% I defer. I defer 13% of pay. We then also fund Roth IRAs for each of us to the max permitted. Finally, we also utilize high deductible health care plans and fund an HSA to the maximum permitted. Finally, we save anything else in a safe CD (but low return) as the retirement funds are all in stocks and bonds.

As for our expenses, we only have our utilities, insurances and other normal living expenses. No CC debt, no mortgage and no consumer loans.

We'll try to discuss our wants/needs during retirement and see if we can generate some type of spreadsheet that will allow us to visualize our status.

Again, thank you for the detailed responses.