I have a huge propensity toward complete chaos and disorganization, and I am quite sure that I am not alone.

How much money will you need to retire? Have you ever given this question serious thought?

Apparently many have not. In the 2007 Retirement Confidence Survey by the Employee Benefit Research Institute and Matthew Greenwald & Associates, nearly half of all workers saving for retirement have saved less than $25,000. That amount will not last long for most people in retirement.

I have met with thousands of people, and the vast majority of them have had absolutely no idea about how much money they will need to retire. Are you in the majority? I know that I used to be!

I was young and believed that I had a lot of time in the future to worry about retirement. Then I learned about compound interest and how much easier it was to achieve my retirement dreams if I started saving early and often. For this reason, I began investing heavily into my 401(k). This was good, but I still did not know if I was saving enough for retirement.

I have a basic formula that can be used to calculate the amount one would need for retirement. To calculate the amount needed for retirement, one needs to know three numbers. First, one should know how much money they will need each year during retirement. Second, one needs to estimate how much the retirement nest egg will grow each year. Finally, one must estimate the rate of inflation.

The retirement nest egg required formula is: Dollars you want per year/(Annual growth rate of nest egg – annual inflation rate).

Here is an example. Suppose one wants $50,000 gross income per year during retirement and that the nest egg would be growing at an annual rate of 8 percent. Inflation has averaged around 4 percent annually. Using these numbers in the formula, one would need $1.25 million to retire today.

It is important to understand that this formula assumes that one will never touch the initial nest egg. I believe that a good man leaves an inheritance for his children’s children, and that is my goal. As a result, this retirement nest egg calculation allows one to live well during retirement and also leave an excellent inheritance.

As a matter of fact, this calculation provides a 4 percent cost-of-living raise every year! In the example, the investment is growing at a rate of 8 percent a year. Eight percent growth of a $1.25 million retirement nest egg would equal $100,000. One is only living on $50,000 each year. Where does the other $50,000 go? Back to the retirement nest egg!

There is a retirement nest egg required calculator available at JosephSangl.com. Click on the “Tools” link at the top of the page. The calculator has an additional feature that also takes into account the number of years you have until you require. If you do not know your required retirement nest egg, I urge you to use the calculator to do so!

There are many free tools and calculators available at Joe’s Web site. You can check them out at

JosephSangl.com.