You should now be aware of many of the variables that can affect your retirement plans but the big question remains. How much capital (money) do you need to accumulate to fund your retirement and avoid the worry of running short of money?

The trick is to find a way to incorporate all of these moving parts into your calculation.

Those who advocate the do-it-yourself approach often overlook the complexities of these various issues that can overwhelm the average investor. Some focus solely on the fees associated with various investment products without considering the many other issues you may face in planning and investing for retirement. Others retreat to low risk, low return investments without considering the long term effects of inflation.

For every story of someone who successfully fired their financial advisor, there will be a story of someone who is thankful they have one – but those rarely make the news.

Assembling all of the required information may seem like a daunting task but reading about it might take longer than doing it. Sitting down with a financial advisor can help. The answers to many of the questions may be right at their fingertips.

Once that information is assembled it must be put to work. Generally speaking, the goal at this stage is to estimate the approximate amount of savings or capital required to fund retirement. Somewhere in all those numbers lies the answer to that question. There are a number of ways to take the next step.

• Attempt to estimate your needs using a calculator, a pencil and a piece of paper.

• Build a spreadsheet using a program like Excel and input your data.

• Use financial planning software or a website that provides financial planning (such as SmartPlanner)

• Enlist the services of a fee-based financial planner to develop a comprehensive financial plan.

Some of these approaches will be time consuming and perhaps inaccurate; others may be expensive and provide overwhelming amounts of information.

If you have accumulated all the necessary information and want an estimate that provides an uncluttered snapshot of your situation, you can use the free from MoneyPages. It will also provide an estimate of the annual contributions necessary to accumulate the capital required and the results are on one page. Assumptions can be changed easily, making it simple to compare the impact that these changes will have.

None of these estimates, calculations or calculators is meant to replace a comprehensive financial plan. They are merely designed to be tools to help investors get started along the right path by identifying broad targets.

The from MoneyPages provides you with far more detailed calculations an analysis in a 12 page report. As with the QuickPlanner, the SmartPlanner is free to use.

Once realistic targets and solutions are determined

the investor can choose to follow that path or can develop a more detailed financial plan. In either case, you will have developed a standard by which progress can be measured and that measurement will determine a course of action to be followed in the future.

Don’t Delay

Many don’t start planning the accumulation phase in detail until the distribution phase is almost upon them. When that happens, a sense of urgency can develop. The goal is to start the process early and avoid panic as retirement approaches.

But there are still no guarantees. Factors can conspire to throw the best laid plans offside. Rampant inflation could make the purchasing power of your guaranteed investment certificates almost worthless. Stock market corrections could throw equity portfolios offside. Poor health could see your medical costs soar. No one knows exactly what the future will hold but those reasons should not be an excuse to avoid laying out a blueprint for your retirement.

You can still make reasonable assumptions and provide a margin for error. These assumptions or estimates are the variables used in setting targets for capital accumulation.

If you still want an estimate for the amount of savings you require, here is a very quick rule of thumb if you are retiring at age 65. Estimate the annual income you will need to generate from your investments in retirement.

Multiply that number by 20 and the result will be the amount of savings you will need to accumulate. Any income from government benefits, pension plans or other sources will be added to your investment income.

If you retire before age 65, the number will need to be larger.

NEXT: Sample Retirement Plan