There are hundreds of variables that go into figuring out your "retirement number" -- the amount of money you need in savings to leave the working world and live the rest of your days in comfort.

You can't pinpoint that number without accounting for each and every detail of your financial and personal situation -- and even then, you may be a bit off. However, it's pretty easy to come up with a ballpark figure. It's just a three-step process, and you'll only need a few pieces of information handy.

An older husband and wife going over paperwork.

Image source: Getty Images

There's a simple equation we can use to figure out this number.

An equation showing one's level of "Enough" minus Social Security and other income, times 25.

Image source: author.

Let's go over how you can make this simple calculation.

1. Quantify your level of "Enough"

As we advance in our careers and climb the earnings ladder, we naturally look for ways to spend that extra money, which means our expectations are constantly rising along with our income. Consider that when you were leaving school, you probably just wanted a job. But once you had that job, you wanted a promotion to help you buy a nice house. Once you had the house, you wanted a new car and a pool in the back. By the time you adjust to the new car, you may be thinking of a summer home on the beach...and on and on it goes.

This "lifestyle inflation" is one of the key reasons upper-class and upper-middle-class families have a tough time saving for retirement. After we've chased after and bought the Next Big Thing, there's nothing left to invest. However, there's a silver lining: We're just as good at adjusting to lower income as we are at adjusting to growing income.

What do I mean by that? Well, you've no doubt heard about the retirement crisis and how baby boomers' low savings will ruin their golden years. Indeed, if happiness were entirely dependent on our consumption levels, we would be a miserable lot.

Yet none of the lived experience of Americans backs that up. That's because once a baseline of material needs is met, each additional dollar of spending matters less and less. A study by Merrill Lynch and Age Wave showed that retirees were by far the happiest lot of us.

Percent Who Said "I Often Feel..."
Create line charts

The reason: While the sting of a lower-income lifestyle might hurt, it only lasts a little while. We quickly adapt.

This is important, because if you really want to know your retirement number, you need to figure out where your own "baseline" exists. When my wife and I were professionals living in Washington, D.C., we routinely spent about $80,000 per year, adjusted for inflation. But when we decided to drastically cut back on our working hours to focus on raising a family and pursuing our passions, that figure was almost cut in half. And while the adjustment wasn't seamless, we are very content.

Everyone's situation will be different, but we shrank our spending primarily by moving to a smaller apartment in a walkable community, getting rid of our car, cooking more food at home, and simply waiting a week before making any purchase over $50 -- with the exception of food.

If we were in our 60s, this picture obviously would look different. But you get the idea. To help guide you through this process, we'll use our own situation. When we looked for our level of "Enough," it came out to about $47,000 per year.

2. Subtract Social Security and any other income

Next, you need to take out any income you'll be getting in retirement. For most people, the largest contribution will come from Social Security. To estimate how much you'll be getting from the program, based on when you retire, you can use this handy tool from the Social Security Administration.

But you needn't stop there. If you have a pension or rental property, or even if you plan to work part-time, you can include that income as well.

In my case, if my wife and I file for benefits at age 62 -- which is a conservative assumption based on the possibility that we'll need to retire early due to unforeseen illnesses or life circumstances -- we're scheduled to get $2,400 per month, or about $29,000 per year.

3. Multiply the rest by 25

In retirement advising circles, there's something called the 4% rule. This rule states that if you keep a mix of stocks and bonds, you can safely withdraw 4% of your nest egg in the first year of retirement and adjust that amount for inflation every year.

While there are debates about how "safe" this figure is, we'll use it to get our ballpark figure. Take the remaining income you'll need on a yearly basis and multiply it by 25. Whatever you get as a result is your "retirement number."

In my case, we had $18,000 per year in expenses left to cover. That means our "retirement number" would be $450,000.

Again, there are thousands of variables that make this number imperfect. It doesn't account for higher healthcare costs, a (hopefully) paid-off mortgage, or helping out family, friends, or children with expenses later in life. But in terms of finding a "ballpark" figure to shoot for, this is a great starting point. 

The Motley Fool has a disclosure policy.