Most people look forward to retirement. This is a period of life in which you can step away from the grind of daily employment and follow your dreams. In a perfect world, everyone would be able to retire without worry or regret. Unfortunately, many people fail to prepare financially. To get started, you’ll need to figure how much money you are likely to need for retirement.

It depends, of course, on how much income you will require in retirement and how much debt you have. It could be possible to retire if you are willing to live a "careful" -- but not lavish -- lifestyle.

You are required to begin taking IRA distributions in the calendar year following the year you turn 70½. Your IRA administrator can calculate the proper distribution amount for you. The annual distribution is usually about 4% of the account balance at the beginning of the year.

If you have the money to do so, you already own your home and can live off of your retirement checks without having to chip into your savings or you can continue to increase your savings, then you're ready for retirement.

If you are working with a disability, you would follow the process outlined in the article to determine how much you will need to save to income when you can no longer work. Hopefully, you had purchased disability income prior to becoming disabled. If you are unable to work, you should apply for Social Security Disability benefits.

Michael R. Lewis is a retired corporate executive, entrepreneur, and investment advisor in Texas. He has over 40 years of experience in business and finance, including as a Vice President for Blue Cross Blue Shield of Texas. He has a BBA in Industrial Management from the University of Texas at Austin.

Social Security retirement benefits may be taxed depending upon your other (non-SS) income. If combined income is greater than $25,000 for an individual ($32,000 for married filers), up to 50% of benefits may be taxable; greater than $32,000 for an individual or $44,000 for a married couple,, up to 85% of the benefit may be taxed.

Michael R. Lewis is a retired corporate executive, entrepreneur, and investment advisor in Texas. He has over 40 years of experience in business and finance, including as a Vice President for Blue Cross Blue Shield of Texas. He has a BBA in Industrial Management from the University of Texas at Austin.

The place we choose to live during retirement often depends upon the location of family and friends. Many retirees, though, are opting to move to places with warmer climates and lower taxes. If you are considering a move, you should consider the following:

Most workers take part in employer-provided 401(k) plans or IRAs. These are tax-advantaged plans that allow you to deduct contributions for income tax calculations. The principal will grow, tax-deferred, until withdrawn from the plans.

Many people set unrealistic goals for themselves. They expect that retirement will be the reward for employment. Once you've figured out how much you'll need, set realistic goals and stick to them.

You can create a spreadsheet that includes all factors and calculates necessary retirement funds. But, this is time-consuming and complicated. A simpler approach is to use one of the many retirement income calculators free on the internet.

Once you know how much you'll need, your next step is to consider how much you are likely to accumulate before retirement. There are number of factors to think about, such as:

How much you need to retire will hinge on how long you will be retired for. This means you'll need to estimate how long you expect to live.

Any sums that must be available after your death reduces the amount available to you during your life. This includes any money you wish to leave to a surviving spouse or heirs.

Many retirees want to see the world in their free time. If this is something important to you, you'll need to add this to your monthly cost estimates as well.

Many people have plans to pursue new interests or hobbies during retirement. Many parents have continuing financial responsibilities for disabled children. Others have health problems that will add expenses. You should include these future costs in your projected retirement income need.

An important first step is to determine the amount necessary to cover basic living expenses each year. There are different perspectives on how much this will be.

Plan for setbacks to your retirement savings plan. For example, you might experience periods of unemployment. Or, you might end up paying for higher education for yourself or your children. If you don't dip into whatever excess you have saved up, you'll come out that much ahead. If you do, you'll still be on track for retirement.

Equity investments have traditionally earned at a higher rate than fixed income securities. As a consequence, maintain a ratio of at least 80/20 of equities in your investment portfolios. Five years before retirement, begin decreasing the ratio of equities to fixed income. On the day of retirement, your portfolio should reflect a 50/50 balance.

Retirement calculations are projections of future events. They are based upon assumptions that may not be valid as time goes by. Planning for retirement is an ongoing, active exercise. It will require constant changes in assumptions and actions between today and your retirement.

Look into your insurance needs. For example, think about investing in long-term care insurance to cover any time that you may have to spend in a nursing home.

Equity prices are volatile. This means returns for any specific period are unknown, especially in the short-term. Since 1930, only 4 of 32 ten year periods had a negative returns. The average annualized 10 year return for the S&P 500 from 1930 to 2013 was 9.7%. The lesson to here is to buy and hold the stocks of growing companies for long-term.

Be cautious about relying on Social Security benefits. Social Security will replace 45 percent of income for most middle-income Americans. The problem with Social Security is that no one knows how it will change in the coming years as the Baby Boomers retire. Don't get caught off-guard by assuming that Social Security will be there for your retirement.

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