Retiring is something that most people eventually do. But while some spend the time doing the things they've always dreamed of, others find themselves living on a fixed income or working during their retirement years. 

The lifestyle you live when you retire can vary greatly depending on how much pre-planning you put into the process. If you have a goal of successfully doing so with enough money to last, make sure you follow these four steps. 

Mature couple sitting in a golf cart and smiling.

Image source: Getty Images.

1. Set a retirement date goal

Are you someone who can't wait until the day you leave your job and hope you can retire early? Or do you love working and will delay it as long as possible? Everyone is different and whether you stop working for good at 62, 67, or 70 is completely up to you.

There is no right or wrong answer. But setting a goal can help you create a plan that will help ensure you attain it. Once you set a date, you'll know approximately how much time you have which can aid you in determining how much you need to save each year. 

2. Create a retirement budget

In the same way that setting a budget helps you pay your bills, save, and enjoy your earnings, making one for your retirement years will do the same. How much do you think you will spend each year? Will you live the exact same lifestyle that you do now? Or will your expenses be a lot lower?

Aiming for 80% of your pre-retirement income is a realistic goal. So if you currently have $50,000 a year in expenses, your retirement budget should be $40,000 using this benchmark. But if you have your heart set on living a lavish life in retirement, you may need at least 100% of your previous earnings. You can create your own retirement budget that is unique to you by taking an audit of all of your bills you think you'll have in retirement. 

3. Assess how close you are to meeting your goal currently

After evaluating what your spending in retirement will be, you should figure out how much income you will have. Aside from social security, will you have any guaranteed income sources? How much will come from your retirement assets each month? Most experts agree that maintaining a withdrawal rate of 4% or less can help you avoid outliving your money. This means that if you've saved $500,000 by the first year of your retirement, you would only withdraw $20,000 and adjust each subsequent year for any changes in your portfolio value. 

You can then figure out how likely you are to meet your goal by doing some forecasting. Using information like how much you can save and how much your accounts could grow from stock market returns, you can project how much you could potentially have when you retire. Next, you can use your expense calculations and get an idea of if you'll exceed your goal, just meet it, or have a shortfall.

4. Solve for any gaps

If you do discover that you won't likely meet your goal, you can figure out how you can get on the right track. This could involve actions like saving more so that you will have enough money. If you earn 8% on average every year, saving $5,000 more each year for 20 years could help you save $247,000 more for your retirement. You can also consider reducing your spending so that you need less money in retirement. Determining which of your bills are things you want versus things you need can help you eliminate unnecessary ones. Distinguishing between expenses that are fixed like your mortgage and which are variable like an electric bill that might change from month to month can also help you potentially reduce spending.

If you can't do either of these, solving for gaps in your retirement plan could involve deciding that you will work longer than you intended. It may seem like figuring out these shortfalls is something you should do when retirement is closer, but the earlier you start doing it, the more control you have over your future. 

Retirement planning can seem intimidating, especially if you fear you won't meet your goal. As tempting as burying your head in the sand may be, knowing where you stand now relative to your goal will help you better reach it. Anyone can retire, but doing so in the way that you want is something that will require work.