Once you reach the point where your career is starting to wind down, you'll probably find yourself pondering one key question: Do I have enough money to retire?

It's a smart question to contemplate, because the last thing you want to do is pull the trigger on retirement only to find that you haven't saved enough for it. Estimating your retirement expenses, however, is easier said than done, because there are so many variables involved. Your health, for example, will play a huge role in dictating how much income you need to keep up with your bills.

Senior couple looking at paperwork


Still, it should help you to know that the average retired household spends $46,000 a year. It's also estimated that one in four seniors who turn 65 will end up living until age 90, while one in 10 will live until 95. If we go the optimistic route and assume a 30-year retirement, that means the typical senior is looking at $1.38 million in spending all in. So if your savings can't support that level of spending, consider this your wake-up call.

How much savings do you need to retire comfortably?

If there were a magic savings number that could guarantee a secure retirement, planning for it would be much easier. But here's a formula that can help. If your portfolio contains a relatively equal mix of stocks and bonds, and you withdraw from your savings at a rate of 3% per year, there's a good chance your nest egg will last for 30 years.

Now if you're familiar with the 4% rule, you'll notice that this advice strays from it and is more conservative. The reason is that today's bond interest rates are nowhere close to what they looked like back in the mid-1990s, when the rule was first established. This lower withdrawal rate helps correct for that.

So let's assume you're looking at a $1 million nest egg. If we apply a 3% withdrawal rate, that gives us $30,000 a year in income, which falls considerably short of the $46,000 the average retiree needs. But that figure doesn't take other income sources into account, and as a senior, there are several you have at your disposal.

First, there's Social Security. At present, the typical retiree collects just over $1,400 a month, or right under $17,000 a year. If we add $17,000 to the $30,000 from above, we're right where we need to be to keep up with the typical senior's yearly living expenses.

Then there are those seniors who might choose to work in some capacity during retirement. That's another source of income to consider if you aren't eligible for much in the way of Social Security, or your savings are lacking. Along these lines, if you own a home in retirement, you can turn it into an income source by renting it out on either a full-time or seasonal basis.

Either way, the point is that it helps to have a spending benchmark, so to speak, so that you're better positioned to evaluate your various income streams and determine whether they're enough. If you're sitting on a $500,000 nest egg and apply a 3% annual withdrawal rate, you'll get $15,000 a year to work with. That, plus another $17,000 from Social Security, will leave you with $32,000, which is well shy of the amount the average senior spends at present. At that point, you'll have two choices: Get creative about generating more income during retirement, or work longer to boost your savings.

Giving your nest egg a last-minute boost

If you're sitting here thinking there's no way your savings will provide enough income to spend what the average senior does each year, the good news is that as long as you're still employed, you have a solid opportunity to catch up. Currently, workers 50 and over can contribute up to $24,500 a year to a 401(k) and $6,500 a year to an IRA. Let's assume you're willing to extend your career three years and max out the former. Even without investment growth, you'll be looking at another $73,500. At a 3% withdrawal rate, that buys you another $2,200 per year in spending, which will help you inch closer to your target income.

But it's not just your nest egg you'll want to boost if you're behind on savings; you'll also want to raise your Social Security benefits, and the easiest way is to delay your filing past your full retirement age. If you're looking at a full retirement age of 66 but hold off on benefits until 70, you'll boost them by 32%, since you get an 8% increase for each year you delay. This means that if you were otherwise looking at about $1,400 a month, you'll get $1,848 instead. On an annual basis, that's roughly $5,200 in extra income for you to utilize.

There's no telling how much you'll ultimately end up spending each year in retirement, but knowing what the average senior spends can give you a target to work with. From there, it's a basic matter of honestly assessing your savings and adjusting your plans if the numbers don't add up. And that's a far better bet than rushing into retirement without that knowledge and struggling financially as a result.