This is a very important question. Usually, the quoted amount is 70% of what you last earned annually, in order to have a satisfactory living. This assumes that you were in perfect health when you retired from your job, and your mortgage is already paid off.

However, if your plans include traveling around the world, to go back to school for a PhD degree, and also to build the perfect house you have always dreamed of, then you could need as much as, or even more than 100% of your last income. When considering the types of expenses you will have after you retire, it is very critical to be completely realistic in your estimates. Remain truthful to yourself when envisioning your retirement life and the costs you will incur.

To be comfortable in your retirement and to be able to afford the things you want, you must realize how important it is to correctly estimate the amount of money you will need. A good way to start would be to look at what you currently spend in different categories of your life, and think of what changes will need to be made. As an example, you will no longer be working, so you will no longer pay the costs of commuting. Also your mortgage will be fully paid, so you will be saving that money monthly. Also consider that the cost of your health care may increase.

After considering these factors, you will be better equipped to estimate how much money you will need to enjoy a comfortable retirement.