NEW YORK (CNN/Money) - Let's face it. Your stock options are kindling and there's no golden parachute in sight. Still, you dream of retiring early -- a goal that seemed feasible during the bull market stampede.

Chances are, however, that Wall Street's rough-and-tumble ride during the last two years knocked the wind out of your portfolio's sails, and with it those lofty plans to retire rich and ahead of schedule.

Or did it?

Whether you meet your early retirement goal depends less on how many hissy fits the stock market throws than on whether you make sound investing and spending decisions now. It also depends on how well you tame your expectations about market returns and the life you'll lead as an ex-working stiff.

Getting a rough estimate of how much money you need to retire early (loosely defined as anything before age 60) is the first step to figuring out how close -- or far -- you are to hitting that goal.

It helps to make some assumptions about how long you'll live. To be safe, use age 95. But if you put down your cigarette and bourbon for a minute, you might get an estimate more tailored to your lifestyle by averaging the results from two life expectancy calculators: Livingto100.com and Northwestern Mutual's Longevity Game.

From there, figure out how much money in today's dollars you'd like to draw annually from your nest egg. That means estimating what your expenses will be in retirement and what new costs you may acquire as a result of lifestyle changes. Don't forget you'll have to pay for health and life insurance policies unless your employer offers you free retirement coverage.

You'll also need to be realistic about how much you can save and invest each year. Obviously, the more, the better. If, for example, you want to retire in 10 years and have nothing saved, you'll need to sock away at least $64,000 a year for every $1 million you hope to have by the time your colleagues throw you a goodbye party, assuming a 7 percent annual return.

Finally, figure out what other income, such as Social Security and pensions, you'll have coming to you and at what age you'll start receiving it.

(For help crunching the numbers and assessing how near you are to your goal, use our Retirement Planner.)

Remember, too, you need to account for inflation. That's because $1 million when you retire will buy less than it would today. So, if you want the equivalent of $1 million based on its current value, your account balance should amount to far more at retirement. Historically, inflation has risen an average of 3.3 percent a year since 1913, but to be safe you might assume 4 percent. If your portfolio can generate an annual 8 percent return, that means you'll net about 4 percent on an inflation-adjusted basis, before taxes.

To ensure that you don't outlive your money, plan to withdraw no more than the inflation-adjusted return, said certified financial planner Dave Caruso, co-author of "Let's Talk Money." That means if you net 4 percent, you shouldn't withdraw more than $40,000 a year for every $1 million you have.

OK, so maybe the numbers in your life don't add up to retirement at 50. You still have a few options before tabling your dream. For example, you can:

Jack up your savings. Yes, this is easier said than done, but if early retirement really is a priority, you can find expenses in your life you're willing to cut. The best strategy, of course, is to purposely NOT keep up with the Joneses. (Click here for 15 ways to live more cheaply.)

Postpone early retirement. "If you have any sort of doubts, work another year or two," said Clare Hushbeck, a labor economist and legislative representative for AARP (formerly the American Association of Retired Persons). The extra contributions to your retirement savings and Social Security can make a huge difference to your long-term economic well-being, she added.

Work part-time in retirement. If you plan to retire early but are worried about your standard of living, you can always seek out consulting work or a part-time job that doesn't crimp your style. Whatever you earn you don't have to pull from your nest egg. If you make just $25,000 a year for five years, for example, that means $125,000 of your portfolio will grow undisturbed. As a result, in five years, you'll have an additional $50,000 at your disposal, assuming a 7 percent return.

Whatever long-term strategy you choose to employ, however, there are a few key areas that require your attention today: your attitude and your portfolio.

For starters, treat whatever losses your portfolio has suffered in the past two years as water under the bridge, said certified financial planner Steven Kaye. You can't change the past, but you can learn from your mistakes.

Clients who came to him after their stock portfolios got hammered shared three things in common: they were overexposed to one investing style (growth), one market cap (large), and one sector (technology). They also mistakenly assumed high returns were theirs for the asking and based their projections accordingly. "People who were banking on much higher returns are in serious trouble," Kaye said.

Going forward, he advised, "It's better to err on the side of conservatism." When Kaye works with clients, he paints three scenarios for them: one in which their investments yield a gross annual return of 5 percent, 6 percent and 7 percent. "No one knows when you're going to hit a bad cycle," he added, noting that in the 17 years between 1964 and 1981, the year-end closing level of the Dow rose all of one point.

Over time, Kaye said, it's more important to protect yourself from losses than it is to reach for high returns. That's because recovering from a loss requires more in gains than you suffered in declines. For example, if you lose 20 percent of a $100,000 portfolio -- that is, your account balance drops to $80,000 -- you'll need to generate a 25 percent return just to make that $20,000 back (0.25 x $80,000). If you lose 50 percent of your $100,000 portfolio, you'll need to generate a 100 percent gain (1 x $50,000) just to get back to where you started.

Being well diversified is one of the best ways to protect yourself on the downside. "The biggest risk to your entire retirement is concentrated positions," Caruso said.

Since stocks offer the best shot at long-term growth, you want the majority of your portfolio in equities, Caruso said, though how much depends on your risk tolerance.

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But you want to make sure growth and value stocks are both well represented in your lineup, and you want exposure to large-, mid- and small-cap stocks, since they tend to perform differently from each other. Caruso suggests what he calls a "six-pack" portfolio for the equity portion of your holdings: 70 percent in two large-cap funds, 15 percent in a small-cap fund and a mid-cap fund, and 15 percent in two international funds. (For help finding your best asset allocation, try our Fix Your Mix tool.)

If you're not going to stick with index funds and prefer funds that are actively managed, only pick those run by fund managers who have beaten their respective indexes for five-to-10 years in a row, preferably 10 years, Caruso said. (To see how your fund managers are faring compared with their peers, check our mutual fund lookup screen.)

And if you're five years or less from retirement, be sure you have at least three-to-five years of living expenses in relatively liquid investments such as short-term bonds and money market funds, he added. That way you won't be forced to sell portions of your portfolio in a down market in order to generate income when you need it.