Once you stop working, though, you need a way to support your dreams of a preferred lifestyle. That means you need a way of building up the retirement income you need in the future.

But how much retirement income should you aim for? And how do you find “your number”?

Finding Your Number

A good place to start is how much you think you will need each month to live the life you want in retirement. You can estimate using your current expenses as a guideline. How much do you need right now to live? Even if you plan to have your home paid off by retirement, the savings on your mortgage will likely be offset by things like higher health care costs and more vacations (everyone likes more vacations, right?).

Experts like to say that you need 70% to 80% of your current income to make it in retirement, but if you want to travel, or do other things, you might need 100% of your current income – or even more.

Also, don’t forget about inflation. There are numerous online inflation calculators that can help you convert today’s dollars to tomorrow’s dollars.

Figure out how you will get the income you need. You can either work to build up income streams that provide you with monthly income, or you can work to create a large enough nest egg to handle your needed withdrawals.

Are You on Track?

Now that you know how much you require, it’s time to determine if you are on track to hitting your retirement goals. How much you set aside now can make a big difference later, thanks to the power of compound interest.

Betterment’s advice feature lets users know if they are on or off track to achieving their goals and makes a number of recommendations to improve the likelihood of success. The advice can be customized and executed with the click of a mouse.

As You Near Retirement

As you near retirement, your estimates and  plans will be put to the test. If you retired in the last ten years, you would’ve faced a different world than if you retired today. The stock market fell and then recovered, which is great for people years from retirement. It’s stressful for those near or in retirement.

Review your plan and see if you’re going to land on or beyond your number. If you’re short of it, you may need to continue working a few more years to give your investments some time to recover and boost your income before retirement. There’s no shame in working a few extra years, sometimes plans don’t work out and you’re fortunate enough to be able to react to them.

As for right now, put together a plan and stick to it. If you don’t, you might find out – too late – that you don’t have enough to live the life you want.