5 Checkpoints on Your Race to Retirement

But when it comes to retirement, many people don't have a sense of how well they're doing or even if they're in the race.
You'll need, all in, at least 15.7 times your pay in your nest egg to fund your living expenses in retirement, according Hewitt Associates' Retirement Income Adequacy at Large Companies: The Real Deal 2010 study.
Thus, you'll need only at least 11 times your pay set aside in your defined contribution plan or other accounts earmarked for retirement.
So, if you have a defined benefit plan, you'll need just nine times your pay to fund your retirement.
One bright spot about Hewitt's number of 15.7 is this: It reflects an explicit assumption that employees will bear the cost of post-retirement medical care, and that medical costs will increase at a rate greater than general inflation.
"While the 10X score can help people gain perspective on the need for retirement planning, it's important to note that this is a baseline number and should only be used as a conversation starter," said Chuck Cornelio, president of the defined contribution business for Lincoln Financial Group.
Many financial advisers say you can safely withdraw 4% on an inflation-adjusted basis from your retirement accounts over the course of your lifetime (or least 30 or so years of retirement) without fear of running out of money.
According to Wade Pfau, Ph. D., an associate professor of economics at the National Graduate Institute for Policy Studies in Japan, the percent that you can safely withdraw and not outlive your financial capital is probably much closer to 2% than 4%.
"While many people base their longevity on the average life expectancy, there is a possibility that they will live well into their 90s," said Sandra Timmermann, the director of the MetLife Mature Market Institute.
For others, especially those who don't have a clue about what to do in their retirement years, it might mean reading "What Color Is Your Parachute?
We have had many clients that have continued to work in new professions or in their current profession with fewer hours well into their 70s and were very happy doing it. By continuing to work part-time they also have more 'fun' money."
If you don't have a good sense of how you will spend your free time, now would be a good to add this to your scorecard and check it off.
For his part, Will Prest of Transamerica Retirement Management said, it's important that you are being emotionally ready to leave work and all your social and time management ties there.
Part of this exercise means getting a sense of who you are, what you are about and what you want to leave as your legacy — and not just the financial one.
That does three things: it helps you build more assets in your retirement accounts, it increases the amount you'll get from Social Security, and it shortens the length of time that you'll need to draw down your assets.