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NEW YORK (CNN/Money) - I'm 38 years old and I invest $1,650 a month into a portfolio of 10 mutual funds that now has a balance of $165,000. If I continue doing this will I have enough to retire?

-- Lou Patel, Savannah, Georgia

That depends, of course, on a number of factors, not the least of which is how long you continue doing this, what size returns you can reasonably expect to earn and, most importantly, how much annual income you'll need from your investments in retirement.

But just for the fun of it, let's do a quick calculation and see what things might look like.

You've got $165,000 now. And let's say that you'll continue socking away that $1,650 a month until you hit age 65. And let's further assume that you'll earn an 8 percent annual return.

If all that happens, your portfolio would be worth roughly $3.3 million by the time you're 65. (For simplicity's sake, I haven't taken taxes into account.) You can do the math yourself using our savings calculator.

Now the question is how much annual income will that generate. Unless you know now that you're unlikely to live to a ripe old age, I believe that you should figure on having to rely on your investment portfolio until age 95 or so.

Given that goal, I would say it's prudent to limit your first year's withdrawal to 4 percent of your portfolio, after which you would increase the dollar value of your annual withdrawal by the inflation rate, which would keep the purchasing power of your withdrawals roughly constant. On $3.3 million, your investments should be able to generate an income of more than $130,000 a year.

Sounds pretty good, huh?

Not so fast. Now it's time for me to issue the Miranda warning that discloses some of the many caveats that come with this highly theoretical exercise we've just gone through.

Let's start with that 8 percent return assumption. Depending on how the stock and bond markets fare and the expenses in your funds, maybe you'll earn more, maybe less.

But this much we do know. If you're investing in mutual funds that hold stocks and bonds, you won't earn 8 percent, or any other return, year after year after year. Some years you may get, say, a 15 percent gain, others you may get a 10 percent loss.

And when you're adding money to a portfolio over time, as you'll be doing, those individual year-by-year returns, not the average return over the period, determine how much you'll end up with.

And, of course, I haven't factored in taxes. Even if you're investing in tax-advantaged accounts like 401(k)s and IRAs, the U.S. Treasury eventually wants a piece of your gains.

Let's say, just for the sake of argument, that you do end up with a stash large enough to generate $130,000 a year or something close to it. You've still got to keep in mind that you'll begin withdrawals in 2032. If we assume modest inflation of, say, 2 percent per year from now until you retire, that $130,000 would have the purchasing power of about $76,000 today.

You'll also have Social Security when you retire. For an estimate of your Social Security benefit in today's dollar's, you can go to one of the benefit calculators at the Social Security site. Keep in mind, though, that the benefit estimate you'll get is based on currently scheduled benefits. Depending on how the whole Social Security reform effort pans out, you could end up with somewhat less.

Is that enough? For someone your age, that is a very difficult estimate to make for the simple reason that it's hard for a 38-year-old to get anything close to a realistic sense of what he'll need in retirement. Too many things can happen over the next 27 years for you to know for sure how much annual income you'll need to fund your retirement lifestyle.

So what should you do? I recommend first of all that you continue what sounds like a pretty ambitious savings plan. The more you save, the better your retirement prospects will be. In fact, I recommend that you try to make your savings plan more ambitious in the sense that you should increase your savings as your income goes up.

That's important for two reasons. First of all, a larger income should free up more money for saving, which should allow you to grow a larger nest egg. Second, as your income rises, so too will your standard of living. Which means you'll need more money in retirement to support that standard of living (unless you see yourself ratcheting down that standard of living after you retire).

The other thing I recommend you do is consider plugging your financial information into an online service that can make sophisticated projections about your odds of retirement success based on the assets you currently have, your planned savings and estimates of your future income and the returns you're likely to earn on those assets.

I'm talking about services that take the variations of the financial markets into account by using Monte Carlo simulations and other techniques. The Retirement Planner at our site has that capability, as does Financial Engines. Many employer offer similar services as part of their 401(k) plan.

Such services have two advantages over the exercise we just went through. First, they're much more rigorous than the simple little exercise we went through with my little spreadsheet. Second, by putting your financial info into one of these online services and then updating it every year or so as your financial situation changes, you'll be able to track whether or not you're making progress toward your retirement goal.

Even more important, as you age you'll be able to get a sense of what changes you must make to improve your chances of retiring comfortably, whether it's saving more, investing your assets differently, changing the timing of your retirement, or all of these things.

So to sum up, it's really too soon to tell whether, if you continue to do what you're doing, you'll have enough to retire 27 years from now. But I can say that if you continue to save diligently, invest sensibly, monitor your progress and make adjustments in your course along the way, you'll improve your odds immensely.

Walter Updegrave is a senior editor at MONEY Magazine and is the author of "We're Not in Kansas Anymore: Strategies for Retiring Rich in a Totally Changed World."