Attempting to determine the amount of money one will need in retirement is an exercise fraught with complexity and uncertainty.

Wall Street Journal personal finance columnist Brett Arends offers his take on the right approach in a recent column.

Arends suggests the following:

1. Determine the amount of annual income you will need in retirement.
2. Estimate your annual Social Security receipts.
3. Subtract defined benefit pension income and any other source of annuity or pension-like income.
4. Multiply the result of the above by 20 to arrive at the amount you will need to save for retirement.

Source: Wall Street Journal

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