Today it is more important than any time in the past to prepare your retirement savings plan. Deciding how much you need to have saved by the big day so that you can live comfortably is not always easy. Here are some great tips to help you calculate your retirement date.

Step One: Determine your retirement budget

The first step in retirement planning is to determine what your retirement budget will be. Most of my clients hate doing this because of two things:

1. They have never done it before.
2. They don’t know where to start.

Retirement planning doesn’t have to be scary or intimidating. When calculating a retirement budget, you won’t get it to the exact penny, but any calculation is better than nothing.

If you have a current monthly budget, you can work from that; if not, you will need to start from scratch. A monthly budget will help you evaluate your expenses and income, and it will also help you figure out new ways to save money.

Make a list of all the expenses you anticipate having once you retire. This would include the cost of housing, utilities, food, clothing, and so on. Keep in mind that your retirement budget may look a little different from what your budget is today. For example, you may no longer have a mortgage payment, you may have no need for work clothes, etc.

You may, however, have new expenses to consider. Do you plan to take up a new hobby in your retirement, increase traveling, or eat out more often? Make sure you include every possible expense—and maybe even some extra money for a rainy day.

Step Two: Determine your fixed retirement income

Next, you need to calculate what your fixed retirement income will be. For example, will you be able to collect Social Security? Does your company offer a pension? Will you have any other sources of income to consider? Total your income and subtract it from your budget.

Your investment portfolio allocation also factors into determining your retirement income. I talk with many people who are skittish of the stock market and so would rather invest their entire portfolio into bonds and CDs. That might be fine if they have millions and millions of dollars saved, but most of us are not in that position.

The fact remains that if you need a certain amount to retire comfortably, but your current retirement savings are inadequate, some risk must be taken. Otherwise, you will surely outlive your investment portfolio.

I usually recommend beginning with around 25 percent in stock and 75 percent in bonds. It’s a good starting point to get your feet wet and see how the markets work. With time, and by using dollar cost averaging, you can eventually get to your optimum asset allocation.

Step Three: Determine how much you need to save before you retire

Your next step is to calculate the total amount you will need to have saved before you retire. With your budget in hand, you now know how much you will need to have available. Multiply that figure by 12 and you will get the approximate dollar amount you will need each year.

Now comes the tricky part—deciding at what age you plan to retire and how long you think you might live. Keep in mind that if you want to retire early, you will need to cover additional expenses like healthcare coverage until you are eligible for Medicare. With these figures, you can come up with a pretty good estimate of the dollar amount you will need in your retirement account in order to feel secure when you retire.

Step Four: Determine your retirement date

Looking at the dollar amount you have now and what you need to have by the time you retire can help you determine when your retirement date can be, but many people forget to calculate factors like inflation and cost of living adjustments.

I always suggest that people expect a higher rate of inflation, say 4 percent, when projecting their retirement needs. If we’re wrong and inflation is only 2 percent, then we have that much more of a cushion.

Step Five: Still confused? Get help.

If this is all seems too overwhelming, you may want to consider working with a financial planner. A financial planner will be able to help you determine how much money you will need for retirement and what steps you need to take to get there.

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Jeff Rose is a CERTIFIED FINANCIAL PLANNER™ professional and an Iraqi combat veteran. He blogs at Good Financial Cents, Soldier of Finance, and Life Insurance By Jeff. Follow him on Twitter: @jjeffrose