Many people understand the role of saving for retirement, but knowing exactly how much they need to save is another point altogether. In spite of all the information available about retirement, it is sometimes difficult to determine what is appropriate for your particular situation. 

The main rule of thumb is that retirees will need nearly 80% of their pre-retirement earnings to keep up their usual lifestyles in retirement. Nevertheless, depending on your own situation and the type of retirement you hope to have, that number may be higher or lower. 

Retirement Age
Firstly, you have to consider the factor of age at which you expect to retire. In fact, many people expect that they will retire later than they actually do. This may happen because of different problems, such as health conditions or workplace changes. No doubt, the earlier you retire, the more money you will need to maintain your lifestyle in retirement. It is very important to prepare for unforeseen occurrences that could force you into an early retirement.

Life Expectancy
There are several factors that may give you an insinuation about your life expectancy. 

You should take into consideration your family history – how long your relatives have lived and sicknesses that are common in your family – as well as your own past and present health condition. Also don’t forget that life spans are becoming longer with last medical developments. More people will be living to age 100, or perhaps even longer.

Future Health-Care Needs
You have to think over one more factor – this is the cost of health care. The point is that health-care costs are rising much faster than general inflation, and fewer employers are offering health benefits to retirees. As for long-term care - it is another consideration. These costs could strongly dip into your savings and even result in your filing for bankruptcy if the need for care is prolonged. 

Inflation
You have to understand that inflation has the potential to lower the value of your savings from year to year. This will significantly reduce your purchasing power over time. That’s why you should to keep pace with or exceed inflation.

Lifestyle
You have to determine for yourself what you are going to do in retirement. Answer the following questions to make prior calculation of your expenses.

- Do you want to travel?
- Are you planning to have an expensive country club membership?
- Do you like to pursue any hobbies?

Social Security
Many pensioners think that they can rely on their future Social Security benefits. Nevertheless, this not always may be true for you. The Social Security system is under increasing strain as more baby boomers are retiring and fewer workers are available to pay their benefits.