It might be time to retire, but a new study...

It might be time to retire, but a new study shows about 81 percent of U.S. adults are clueless about how much it will cost. Credit: Getty Images iStockphoto / donskarpo

How much money do you need to retire? If you don’t know the answer to that question, you’re not alone.

A new survey by Merrill Lynch and Age Wave asked nearly 5,000 adults that question and 81 percent were clueless too.

No wonder there’s a retirement crisis. You have to know what you need if you’re going to come close to getting it.

Do a reality check

You may spend less in retirement — or you may not. “Many pre-retirees think they will spend less money when they retire. We see just the opposite. People have more free time — they can travel more and spend more on entertainment,” says Larry Heller, a certified financial planner with Larry Heller & Associates in Melville.

Estimate expenses

It’s hard to know now what life will be like, especially with the wild card of health care. Do your best to create a budget. Be sure to include extras like vacation, not just fixed expenses.

“Run that budget and 3 percent COLA (cost of living adjustment) to age 65 for a general idea of how much monthly income you will need in retirement. Be sure to eliminate mortgage, school loans, anything that will be paid off by age 65,” says Calvin Goetz, co-author of “Climbing the Retirement Mountain.”

How much do you need?

There are many ways to come up with your number. “One rule of thumb is that you should have around 75 percent of your last year’s income before retirement coming in each year, from Social Security, retirement plan, investment income, savings, etc. However, adjust that number upward or downward based on your life expectancy, health, life style, location, etc.,” says Rakesh Gupta, associate professor at Adelphi University’s Business School in Garden City.

After you do the math, exhale. Says Rick Delgado, an associate at Revolution Financial Management in Hauppauge, “Your number may scare you, but it’s an estimate and hopefully a motivator to get you saving.”