With so much uncertainty about where the future is headed, how do we know if we've saved up enough money to last us for the rest of our lives?

Few of us know what that magic nest egg number should be. Even fewer have even tried to figure out what the number should be.

Hiding our heads in the sand is the worst approach to take. Let's look at some of the biggest issues we should consider to determine if we are saving enough.

Current vs. future expenses

The first question to ask is, How much will I need in retirement? Although many reports have suggested that 70-80% of current income should be sufficient, there are many arguments against that idea.

Most pre-retirees can expect that their monthly expenses will not change much. Since so many households have refinanced in the last decade, it is safe to assume that there will still be a mortgage payment in the early retirement years.

Some retirees also want to be able to buy or lease new vehicles every few years, which adds another monthly expense.

More free time will also lead to new hobbies and increased travel, whether it is domestic or international. These new expenses will replace other pre-retirement expenses.

What about Social Security?

The good news for the early Baby Boomers is that they will still be able to count on Social Security. Unfortunately, unless changes are made to the current system, some retirees may not.

Shortfalls are expected as early 2037. This may mean a reduced monthly Social Security check. For some, they may see reduced retirement income in the later years. Others will be impacted at the beginning of their retirement years.

Nevertheless, Social Security checks are rarely enough to be the only source of retirement income. It would be helpful for most pre-retirees to build a supplemental savings during their working years.

The impact of inflation

The silent killer of retirement dreams is inflation. It creeps up on us slowly and makes it difficult to afford things.

Inflation has averaged increases of about 3% per year. That means that the cost of living will double every 24 years. While that may seem like a long time, consider this: A 40-year old couple has expenses that average $3,000 per month. In 24 years, if nothing significant changes in their lives, those same expenses will cost $6,000 per month. By then, they will be 64 years old, and retired or close to retiring.

Again, if there are no significant changes in their spending habits, their monthly expenses in another 24 years will be $12,000 per month. These gradual increases will happen during retirement years. There will be no more income. They will be dependent upon the savings they've accumulated.

So, if $3,000 per month during working years will be $12,000 per month during retirement years, it is easy to see just how important it is to save for retirement.

These are just a few of the key factors that we should consider as we determine how much we need to save for retirement. However, just these issues alone have pinpointed that there is no way to get around the fact that we need to be contributing to a retirement savings of our own to supplement any other retirement income source we may be counting on.