According to new figures from the Census Bureau, inflation adjusted income for the median US household rose by just 0.3% in 2013. This means that the median household income increased $180 last year to $51,939. This is the amount I would need in order to live as well as that average American family and it's probably a good number to shoot for if you're thinking about retiring any time in the very near future.
Next I examine the lifestyle of the average family and compare my lifestyle to that. If I expect a higher lifestyle than the average American family, I need to adjust my expected income needs upward. If I desire a somewhat lesser lifestyle I can adjust my income needs lower.
The final thing I do is look at the type of income I expect to receive in retirement. I need that income to increase over time at a rate equal to or greater than the rate of inflation in order to preserve my current purchasing power. If that's not possible then my income and lifestyle will soon get ravaged by inflation and I will slowly fall into a level of poverty that will eventually drive me back to the workforce. And that would be disastrous because there simply aren't very many well paying jobs for 70 and 80 year olds.
Over the years these ideas have provided me with the guidelines I've needed to determine when I'll be financially able to finally retire. I think they're pretty good guidelines and I hope they provide others something to think about too.