Most financial planners agree that you'll need 70%-80% of your current income to live comfortably in retirement. This is a conventional guideline. However, this approach is sometimes considered simplistic and may, in fact, underestimate your real needs. At Schwab, we believe a smart alternative approach is to determine how much it may cost to maintain the lifestyle you want during retirement.

Start by itemizing what you're spending now on a monthly basis. Then look at how those expenses might change as you move into retirement. What expenses will decrease? Where might you spend more? With those figures in hand, you'll have a better idea of how to adjust either your savings – or your expectations – to reach a more realistic goal.