How much do you need to retire?

The answer depends on a variety of personal factors, starting with how much you need to float your lifestyle today.

Because so many people hate the idea of figuring out what they are spending now, they often use an old financial planning calculation to determine their retirement income need: reduce current salary by 20 percent. The rationale behind this strategy is: In retirement, people will no longer be on the hook for payroll taxes, retirement plan contributions or commuting costs.

Of course, if you are living on far less than 80 percent of your current pay or some of your big expenses such as mortgage and school loans will disappear during retirement, you may want to use a lower monthly need. Then again, according to a report by HealthView Services, the average couple should expect to spend $266,600 throughout retirement on health care. So maybe that 20 percent reduction is not such a bad substitute for your future monthly nut.

Once you have your retirement need in hand, you should determine how much income you will receive from Social Security and pensions. Any shortfall between your monthly need and your stream of income has to come from your investments.

I continue to emphasize the importance of using a reasonable "withdrawal rate," which is the percentage that retirees can safely withdraw from their assets annually without depleting their nest eggs. A conservative withdrawal rate is 3 to 3.5 percent on an annual basis. That means every $1 million you save can generate about $30,000 to $35,000 of annual retirement income.

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The biggest problem in figuring out how much you need to retire is that it requires a lot of moving parts to operate smoothly over a long period of time. As economist Paul Krugman, a columnist for The New York Times, says: "In an idealized world, 25-year-old workers would base their decisions about how much to save on a realistic assessment of what they will need to live comfortably when they're in their 70s . . . In the real world, however, many -- and arguably most -- working Americans are saving much too little for their retirement. They're also investing these savings badly."

How badly are Americans at investing? A recent study found that just 48 percent of Americans own stocks or stock mutual funds. Of those who don't participate in the stock market, 53 percent say they simply don't have the money to invest. Considering that median per capita income, adjusted for inflation, has basically been flat since 2000 and many Americans are still climbing out of a massive hole from the Great Recession, that result is not surprising.

But a whopping 39 percent cite reasons for avoiding stocks that are worrisome: 21 percent don't know about stocks; 9 percent don't trust brokers or advisers; 7 percent think stocks are too risky; and 2 percent are afraid of high fees. All of those rationalizations can be resolved without much work, especially in an age of abundant, free information and resources.

Here are a few answers to questions that may keep people sidelined from the market:

What is a stock, and isn't owning a stock risky?

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When you own a share of stock, you are a part owner in a publicly traded company. Stocks as an asset class are risky, which is why when most people invest, they use mutual funds and spread out their risk among different assets, like stocks, bonds, real estate and cash.

What if I don't trust brokers or advisors and/or want to avoid high fees?

To invest without an intermediary in an affordable way, just use no-commission index funds. Some of the most inexpensive index funds are offered through Vanguard, Fidelity, T. Rowe Price, TD Ameritrade and Charles Schwab.

Jill Schlesinger, a certified financial planner, is a CBS News business analyst. She welcomes emailed comments and questions.