Is $1 Million Really Enough to Retire? Here's How to Find Out.

Retirement is not cheap, and it's only getting more expensive for many older adults. Considering the average retired worker collects less than $2,000 per month from Social Security,  many retirees will need to rely heavily on personal savings to make ends meet.

But just how much do you need to retire comfortably? A nest egg worth $1 million is a common benchmark, but that figure won't fit every retiree. Some seniors may be able to get by with less, while others could need far more just to survive.

While your goal will depend on your unique needs, there are a few steps you can take to determine whether $1 million is enough -- and if it's not, how much you should be saving.

1. Consider how your expenses may change in retirement

The first step to determining your savings goal is to think about how much you're currently spending, as well as how those costs may change once you retire.

A common rule of thumb is that you'll need 80% of your pre-retirement income after you retire. So, for example, if you're currently spending $60,000 per year, you could expect to spend around $48,000 per year in retirement.

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While that can be a good place to start, it won't be accurate for everyone. If you move to a new city with a different cost of living, for example, your expenses could shift substantially. Or if you expect to pick up expensive new hobbies or travel the world, you may spend far more than you do now.

It's also wise to at least try to budget for costs you may face later in life, like greater healthcare expenses or long-term care. Of course, it's impossible to know for sure what you'll spend on these costs or whether you'll face them at all. But if you can at least keep them on your radar, it will be easier to prepare for them.

For a very rough estimate, you can use the rule of 25 to calculate your savings goal. Take your expected annual expenses and multiply that figure by 25, and the result is how much you should aim to save in total. So, for instance, if you expect to spend $48,000 per year, multiply that by 25, and you have a savings goal of $1.2 million.

2. Calculate your outside income sources

If you're lucky, you may not have to rely entirely on your savings in retirement. Most workers are eligible for Social Security benefits once they retire, and that can help ease the burden on your nest egg.

You can see your estimated future benefit amount by checking your statements, either through your online Social Security account or via paper statements if you receive them in the mail. This estimate is based on your real earnings, and it's the amount you'll collect if you claim at your full retirement age .

Keep in mind that if you file for benefits before or after your full retirement age (which is 67 for everyone born in 1960 or later), it will affect the size of your checks. Claiming at 62 will reduce your payments by up to 30% per month, while delaying until age 70 will earn you a bonus of at least 24% per month on top of your full payments.

Once you know what to expect from Social Security or other sources of income, it will be easier to determine how much will need to come from your savings.

3. Be realistic about your life expectancy

When you have a solid estimate of your expenses and how much you'll be pulling from your savings each month, the next step is to determine how many years you expect to spend in retirement.

While this is a simple enough number to estimate, be honest with yourself here. Life expectancy isn't the most pleasant topic to think about, but the more accurate your estimate, the more accurate your savings goal will be.

Nobody knows exactly how long they'll live, of course. But if everyone in your family has lived into their 90s, for example, it may be wise to budget for a longer-than-average retirement so you don't risk running out of savings late in life.

While the rule of 25 can give you a ballpark estimate of how much you should save, if you want a more accurate target, run your information through a retirement calculator . Taking factors like your life expectancy and Social Security benefits into consideration can give you a more realistic picture of your savings needs, and a calculator will give you a more personalized goal.

It's not always easy determining your savings goal, but the process is more straightforward than it might seem. With these three steps, you'll be on your way to building a nest egg that can last a lifetime.

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