Most financial planners will use  the term, "replacement rate" to help you determine how much money to save for retirement.  The replacement rate is simply the amount of your existing income you'll need to meet income needs in retirement.  Most financial planners will suggest we need between 78-85% our pre-retirement income will be necessary.  Humberto Cruz suggests this retirement "rule-of-thumb" may be a bit misleading.

Are you all set? Don't be so sure. Relying solely on such a replacement-rate formula will ignore what VanDerhei calls the most important financial risks retirees face.

Those are:

>Investment risk, or the risk that the investments you rely on for your spending money won't perform as you expect.

>Longevity risk, or the risk that you will live longer than expected so your money will have to last longer and keep up with inflation longer.

>The risk of catastrophic health-care costs.